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Broadband's Impact

FCC Chairman Ajit Pai Praises Agency’s Work in Promoting High-Speed Internet at ‘Broadband Heros’ Event



Photo of Ajit Pai at US Telecom event by Masha Abarinova

WASHINGTON, October 24, 2019 – US Telecom on Thursday praised legislators and a regulator who have promoted their framework for ensuring that high-speed broadband remains a top national policy concern.

The lobbying group for the biggest telecom companies did so at a broadband investment forum event honoring their “broadband heros” that they said had made significant strides to improve connectivity.

Federal Communications Commission Chairman Ajit Pai touted his agency’s record on broadband deployment over the past few years.

The progress made by the FCC’s regulatory streamlining, Pai said, has provided much improvement for the agriculture and education sectors. Wireless internet has become so advanced that children are able to seamlessly upload their schoolwork through McDonald’s Wi-Fi, he said.

Among the other “broadband heros” recipients were Sen. Roger Wicker, R-Miss., Sen. Kyrsten Sinema, D-Ariz., Rob Koester of Consolidated Communications and Darby McCarty of Smithville Communications.

Broadband has come far in only a quarter of a century, said Wicker. Yet bipartisan support is needed to address current broadband’s key issues, such as low-quality mapping. The companies represented here today, he said, will play a major role in winning the “race to 5G.”

Telecom’s role has gone beyond merely providing and building service, said Koester. Broadband leaders now need to educate the public about the issues and the best practices for improving them.

A panel featuring prominent industry leaders discussed the federal government’s role in adopting faster internet and how fiber optic broadband can help with that.

The support mechanisms for broadband funding are in a winner-take-all environment, said Tony Clark, senior advisor at Wilkinson Barker Knauer. Some incumbents receive more subsidies than others, and the incumbents without the mechanism are expected to fulfill the same obligations.

Delivering a high-speed, low latency connection involves determining the trade-offs for that result, said Paroma Sanyal, senior consultant at The Brattle Group. If providers are only focusing on costs, then the outcome of the infrastructure will be different.

The keys to 5G success, Sanyal said, are the backhaul process and low-latency technology that allows for precision agriculture. That is why fiber is a future-proof technology that is very beneficial for 5G growth.

Machine learning on how to develop broadband and fiber, said Windstream President and CEO Tony Thomas, has caused providers to make highly informed decisions. As a result, broadband is now available in areas that a few years ago were barely connected.

The leap to 5G could be the fourth Industrial Revolution, said Kathy Grillo, senior vice president of public policy and government affairs at Verizon. Not only is fiber needed everywhere to receive 5G connectivity, she said, regulatory policy needs to be developed to start building these networks.

But before 5G can be properly implemented, the panelists emphasized the need to address rural coverage gaps.

Billions of dollars have been invested into digital infrastructure for the past 20 years, said US Telecom CEO Jonathan Spalter. The government can provide indispensable input to accelerate rural connectivity, he said, particularly through the FCC’s Rural Digital Opportunity Fund.

It’s one thing to build broadband networks, said Blackfoot CEO Jason Williams. Operating and maintaining them is completely different and requires some regulatory oversight.

Going forward, the FCC needs to make sure subsidies are effectively distributed so that incumbents don’t walk away from any viable options, said Consolidated Communications CEO Bob Udell.

The partnership between the public and private sectors, Udell added, is imperative for broadband opportunity.

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Broadband's Impact

FCC Inspector General Suspects Providers of Improperly Taking Subsidies

The agency’s Office of the Inspector General said providers were still paid for un-enrolled subscribers.



Photo of the FCC's headquarters at 45 L Street NE from the Smith Group.

WASHINGTON, October 2, 2023 – Dozens of mobile broadband providers are likely not complying with federal subsidy rules, the Federal Communications Commission inspector general said in a report on Friday.

The Affordable Connectivity Program provides about 20 million low-income households a $30 monthly internet discount. That money is paid by the government to providers giving those households broadband service.

When customers receiving ACP discounts stop using a provider’s broadband service, the provider is required to report that to the FCC so money is only disbursed for active users. Typically, anywhere from a third to one half of an ACP provider’s subscribers will be de-enrolled each month, according to the report from the Office of the Inspector General.

But the OIG said that it found “dozens” of providers report few, if any, of these lost customers, making it likely the providers are taking government subsidies for broadband service they are not providing. It did not name the providers.

“We strongly suspect [the unnamed providers] are not complying with program usage and related de-enrollment rules,” the OIG wrote.

One company repaid the commission almost $50 million after being approached by the OIG. That’s one third of all ACP subsidies the provider received from June 2021 to July 2022.

The OIG released data from five of the suspect providers showing they failed to de-enroll more than three percent of their monthly subscribers, making them and similar providers outliers among ACP providers. One provider had over 1 million subscribers.

The office said in its report that it has gathered additional evidence of the same providers taking ACP money for subscribers who are not using their service. Those investigations are ongoing.

In 2021, the OIG found similar abuses in the Emergency Broadband Benefit program, a predecessor to the ACP. The office again found dozens of providers reporting more households with dependent children than existed in several school districts.

In response to the report, the FCC released a public notice directing the Universal Service Administrative Company, the arm of the agency responsible for administering the ACP and other broadband subsidy programs, to strengthen its monitoring around de-enrollment and other requirements.

The ACP, a $14 billion fund set aside by the Infrastructure, Investment and Jobs Act, is set to dry up in April 2024. There have been repeated calls for Congress to renew the program.

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Broadband's Impact

Mississippi Nonprofit is Looking to Fill Gaps in Affordable Connectivity

The nonprofit Connect and Literacy Fund is planning to increase ACP adoption in Mississippi.



Screenshot of the event on Wednesday.

WASHINGTON, September 28, 2023 – A Mississippi nonprofit is setting up a fund to support connectivity and digital literacy in the state.

The Mississippi Broadband Association is looking to raise $10 million to start the fund, which MSBA Executive Director Quinn Jordan said is intended to ensure newly built broadband infrastructure stays affordable in the state.

“We can build these networks,” he said, speaking at a Fiber Broadband Association webinar on Wednesday, “But if we don’t get people connected, if they don’t have the literacy or capability to do so, what have we really done?”

The initiative, called the Connect and Literacy Fund, is planning to increase ACP adoption in Mississippi. Over 18 percent of the state lives below the poverty line, making them eligible for the $30 monthly internet discount, but less than half that number participate. The MSBA is planning to make ACP sign-up part of the registration process to participate in the fund’s programming.

That programming will focus on teaching people how to use internet services like telehealth and streaming and provide large discounts for tables and PCs. The ACP provides a $100 device subsidy, but this is rarely enough for low-income households to make a purchase, Jordan said.

Difficulty accessing affordable devices is contributing to the digital divide in Mississippi, according to Jordan. He pointed to the fact that over 40% of Mississippians do not have access to a tablet or computer.

“That is a huge number. And it’s a barrier to entry,” Jordan said. “The Connect and Literacy Fund is hopefully going to address that.”

Jordan said the $2.75 billion Digital Equity program, part of the Biden Administration’s Infrastructure, Investment and Jobs Act, will be beneficial, but MSBA’s Connect and Literacy Fund will have a role to play in ensuring the state builds on the gains it makes with the federal funds.

“That money is going to run out,” he said. “What we’re doing is ongoing.”

The ACP might also be short-lived. The $14 billion allocation from the Infrastructure Act is set to dry up in April of next year.

MSBA has spent the last two months developing its programing and is looking to start coordinating events with local anchor institutions in the coming months, Jordan said. 

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Broadband's Impact

Tech Trade Group Report Argues for USF Funding from Broadband Companies

Consulting firm Brattle Group said in a report the move would be economically sound.



Screenshot of Chip Pickering, INCOMPAS CEO

WASHINGTON, September 19, 2023 – Tech company trade group INCOMPAS and consulting firm Brattle Group released on Tuesday a report arguing for adding broadband providers as contributors to the Universal Service Fund.

The USF spends roughly $8 billion each year to support four programs that provide internet subsidies to low-income households, health care providers, schools, and libraries. The money comes from a tax on voice service providers, causing lawmakers to look for alternative sources of funding as more Americans switch from phone lines to broadband services.

The Federal Communications Commission administers the fund through the Universal Service Administration Company, but has left it to Congress to make changes to the contribution pool.

The report argues that broadband providers should be one of those sources. It cites the fact that USF funds are largely used for broadband rather than voice services and that broadband adoption is increasing as phone line use decreases.

“The USF contribution base needs to change to account for the fact that connectivity implies not just voice telephone services, but predominantly broadband internet access,” the report says.

It also rebuts arguments for adding tech companies like INCOMPAS members Google and Amazon to the contribution pool, saying they represent a less stable source of income for the program and that added fees for services like streaming could affect . 

The report is the latest salvo in an ongoing dispute between tech companies and broadband providers over who should support the USF in the future, with broadband companies arguing big tech should be tapped for funding as they run businesses on the networks supported by the fund.

Sens. Ben Lujan, D-N.M., and John Thune, R-S.D. established in May a senate working group to explore potential reforms to the program. The group heard comments in August  from associations of tech and broadband companies, each outlining arguments for including the other industry in the USF contribution base.

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