September 5, 2020 — Local telecommunications officials involved in renewing local cable franchises criticized the consequences of the Federal Communications Commission’s ruling on the topic called the Section 621 order.
The conversation among members of the National Association of Telecommunications Officers and Advisors annual conference, meeting virtually on Monday, centered around the experiences local franchising authorities are having renewing their franchises with some of the largest video service providers: Comcast, Charter, Cox, and Verizon.
Many of them complained about the Section 621 order, which implements provisions in the Cable Communications Policy Act of 1984.
The lastest installment of the multi-decades saga over this provision went into effect in September 2019. NATOA members said that the FCC’s most recent order is stifling operations, raising the amount cable operators charge local authorities, and making cable franchise renewals increasingly difficult for local authorities.
The move “has complicated negotiations on issues that used to be rather straight forward,” said Brian Grogan, attorney with Moss and Barnett.
The FCC ruled that local cable franchising authorities cannot regulate a cable operator’s broadband service. It further established that in-kind services or equipment, which operators require local cable franchisers to provide, must count toward the law’s five percent cap on franchise fees.
“This is the most consequential order for local cable franchisers that the FCC has had,” said Rick Ellrod, director of the communications policy and regulation division of Fairfax County’s Department of Cable and Consumer Services.
“We were making progress on franchising renewals until the order came out,” he said.
A long history of court appeals appeals over the language of cable franchising fees
The FCC’s decision in September – the third order on the topic – is currently being reviewed by the Sixth Circuit Court of Appeals in Cincinnati, which has ruled on the two prior disputes about cable franchise fees between the FCC and the cable companies on the one hand, and the municipalities on the other.
When the FCC’s third order was issued, the agency refused to “stay,” or halt implementation, until a final decision by the appeals court. In March, that appeals court upheld the refusal to stay the FCC order.
“And though we remain open to any argument that the franchising authorities choose to make in their merits briefing, their arguments in the motion to stay do not, at this stage, persuade us that the FCC’s interpretation of ‘franchise fee’ is mistaken,” wrote judges David McKeague, Richard Allen Griffin and Raymond Kethledge in their ruling (PDF).
“Our decision in the last appeal should make clear to everyone that we take seriously the franchising authorities’ disagreements with the FCC regarding interpretation of the Act,” the judges continued in their unanimous opinion. “But in essence the franchising authorities have asked us to enjoin what appears to be a correct interpretation of a federal statute.”
The FCC’s latest Section 621 order has already affected municipalities
Throughout the conversation on Monday, the NATOA officials were clearly rooting for the municipalities on the merits of the case as it continues before the appeals court. A final decision on the matter is not expected until the Spring of 2021.
According to many of the webinar participants, the Section 621 order has already begun to affect local franchising authorities by increasing the cost of cable franchise fees.
The order promises to “effect public educational and governmental access channels, courtesy services, and I-NET,” said Timothy Broering, executive director at the Telecommunications Board of Northern Kentucky, which may lead to increased rates.
Broering argued that these were amenities originally “built and paid for by cable subscribers,” yet some local franchisers are being charged by operators for these services today.
“Cable operators need to prove that they have current costs,” said Broering, adding that “there is no fair market value of PEG transfer, it was paid for by cable subscribers.” He was referring to the public, educational and governmental channels that are often a condition of video franchise licenses.
The order is further affecting the ability of local authorities to access high definition channels.
“We’re producing HD everywhere except cable channels right now,” said Ellrod, detailing his team must originally produce their show in high-definition video and then down-convert.
“Verizon is not going to offer HD channels” to local franchisers, added Ellrod.
FCC Seeks Comment on Higher Broadband Speeds and Increased Security Measures for Certain Carriers
FCC will consider raising the speed standard for certain carriers that receive fixed monthly funding from the agency.
WASHINGTON, May 19, 2022 – The Federal Communications Commission voted at its open meeting Thursday to seek comment on enhancing the Alternative Connect America Cost Model program, which would raise speed deployment obligations and align security goals with the Infrastructure, Investment and Jobs Act.
The ACAM program, established in 2016, provides fixed monthly funding to certain carriers serving high-cost and hard-to-reach areas in return for commitments to provide broadband service to all eligible locations.
The ACAM broadband coalition requested that broadband deployment obligations be raised from the current federal standard of 25 Megabits per second download and 3 Mbps upload to 100/20 Mbps, the standard now set by the IIJA that will then be required of ACAM carriers to deliver.
Baseline cybersecurity proposal
The FCC is also requesting comment on whether it should “require A-CAM carriers and carriers receiving high-cost support to have a baseline cybersecurity and supply chain risk management plans.”
Commissioner Geoffrey Sparks indicated that the FCC will focus its efforts on harmonizing ACAM’s modification proposal with cyber security standards indicated in the Broadband, Equity, Access and Deployment program, which is managed by the Commerce Department’s National Telecommunications and Information Administration and that will be disbursing billions in broadband infrastructure funding.
“Networks that are subsidized or built with federal funds must be secure,” Sparks said. “This is evident in the constant barrage of attacks on American networks from hostile state and non-state actors.”
FCC Chairwoman Jessica Rosenworcel, who said the FCC is looking to align its goals with the IIJA, concluded that “this is not the only effort we’re making to ensure that new broadband programs are working hand-in-glove with long-standing FCC efforts.”
Treasury Department Joins FCC, USDA and NTIA in Collaborating on Broadband Funding
Agency leaders sign pact to formalize information-sharing on broadband deployment projects.
WASHINGTON, May 13, 2022—Just in advance of the deadline for the release of the funding requirements under the Infrastructure Investment and Jobs act, the four principal federal agencies responsible for broadband funding released an interagency agreement to share information about and collaborate regarding the collection and reporting of certain data and metrics relating to broadband deployment.
The agencies are the Federal Communications Commission, the U.S. Department of Agriculture, the National Telecommunications and Information Administration of the Commerce Department, and the U.S. Department of the Treasury.
The Memorandum of Understanding is the latest development in federal efforts to coordinate high-speed internet spending, and the Treasury Department is the new addition to agreement.
The other three agencies signed a prior memorandum in June 2021 to coordinate the distribution of federal high-speed internet funds. That June 2021 Memorandum of Understanding remains in effect.
The respective Cabinet and Agency leaders announced that their agencies will consult with one another and share information on data collected from programs administered by the FCC, the USDA’s Rural Utilities Service, programs administered or coordinated by NTIA, and Treasury’s Coronavirus Capital Projects Fund and State and Local Fiscal Recovery Fund.
“No matter who you are or where you live in this country, you need access to high-speed internet to have a fair shot at 21st century success. The FCC, NTIA, USDA and Treasury are working together like never before to meet this shared goal,” said FCC Chairwoman Jessica Rosenworcel. “Our new interagency agreement will allow us to collaborate more efficiently and deepen our current data sharing relationships[and] get everyone, everywhere connected to the high-speed internet they need.”
Agriculture Secretary Tom Vilsack said, “When we invest in rural infrastructure, we invest in the livelihoods and health of people in rural America. High-speed internet is the new electricity. It is necessary for Americans to do their jobs, to participate equally in school learning, to have access to health care and to stay connected.”
“USDA remains committed to being a strong partner with rural communities and our state, Tribal and federal partners in building ‘future-proof’ broadband infrastructure in unserved and underserved areas so that we finally reach 100 percent high-speed broadband coverage across the country.”
“Our whole-of-government effort to expand broadband adoption must be coordinated and efficient if we are going to achieve our mission,” said Alan Davidson, Assistant Secretary of Commerce for Communications and Information and head of the NTIA, the agency responsible for administering the vast bulk of the broadband funding.
“This MOU will allow us to build the tools we need for even better data-sharing and transparency in the future,” he said.
“Treasury is proud to work with our federal agency partners to achieve President Biden’s goal of closing the nation’s digital divide,” said U.S. Treasury Secretary Janet L. Yellen. “Access to affordable, high-speed internet is critical to the continued strength of our economy and a necessity for every American household, school, and business.”
As part of the signed agreement, each federal agency partner will share information about projects that have received or will receive funding from the previously mentioned federal funding sources. More information on what the interagency Memorandum of Understanding entails can be found on the FCC’s website. The agreement is effective at the date of its signing, May 11, 2022.
Christopher Mitchell: Former Sen. Heitkamp’s Attacks on Gigi Sohn for FCC are Wildly Off-Base
Former North Dakota senator sounds practical, but she is misreading quotes or taking them out of context.
Gigi Sohn is still up for confirmation by the Senate to complete the Federal Communications Commission – an independent agency in the executive branch of the federal government that has been stuck at a 2-2 split of Democrats and Republicans since President Biden took office. The FCC is supposed to operate with five commissioners, with the party of the President in power having 3 seats.
She was the obvious choice in December of 2020, when it was clear that Joe Biden would take office. With decades of history in telecom and media-related policy as well as a recent stint as Counselor to Tom Wheeler when he was Chair of the FCC, she would be among the most-qualified people to serve on it since I began working in telecom in 2007. And by among, I mean at the top.
I’ve known Gigi for many years and respected her from the first time I saw her in action. She isn’t a political agent trying to figure out the best path to the top. She has strong beliefs, and she’ll tell you what they are in a wonderful Long Island blur of passion. She respects other beliefs and ideas but she isn’t going to pretend she agrees with you when she doesn’t.
Maybe my word isn’t that persuasive, because I tend to agree with Sohn on many issues. But a lot of people with far more credibility among conservatives have spoken up on Gigi. So I hadn’t written anything about this because I assumed it would take time but Gigi would get confirmed. Plus, I focus my work outside DC and there is a lot going on that is keeping us busy.
Gigi was always under fire by the likes of the Wall Street Journal Opinion page, which has made baseless claims about her not being committed to free speech, using tortured logic around denying mergers. If I went off every time that bunch embarrassed the good work of their reporters, I wouldn’t do anything else.
But then some allies forwarded me claims coming from former North Dakota Senator Heidi Heitkamp – someone I have listened to being interviewed on podcasts and generally thought well of because she sounds practical. But the attacks from Heitkamp on Gigi are so off-base that I had to respond because I’m often working with people in rural communities for whom this issue is not theoretical. They have suffered for more than a decade of federal and state mismanagement of broadband expansion programs. Their towns are struggling as hospitals close and jobs move away to areas with better access. Their children have fewer educational opportunities. They face greater risk from communications failures in natural disasters. Getting this right is important.
Multiple off-base complaints about Gigi Sohn and rural America
Heitkamp makes multiple claims that Gigi’s confirmation would be bad for rural America based on misreading quotes or taking them out of context to pretend that Gigi is not concerned with rural broadband challenges. Like this:
- During an April 2021 interview with Bloomberg Government, saying ‘What [have we gotten] for [the federal government’s existing] $50 billion investment? Not much.’
Is this a sign that Gigi thinks we shouldn’t spend money in rural America? That is what Heitkamp wants you to believe. But the very next passage in that article says this:
- ‘What do we get for a $50 billion investment? Not much,’ she said in an interview. ‘What we don’t want is to be in the position we are today: where we built networks that were for then, and not for now, and not for the future.’
The article is about whether money spent on rural broadband subsidies should be built using yesterday’s or tomorrow’s technology. Gigi has been on the right side of this question – we should be making sure that investments in rural America will permanently solve the problem.
Heitkamp was Senator from 2013-2019, a time when the federal government gave multiple billions of dollars to the biggest telecom monopolies – like AT&T. They didn’t even meet the pathetic requirements of that program. Like, at all.
Don’t just take my word for it. Minnesota’s Blandin Foundation has long been a national model for seeking broadband solutions that really work. That work is run by Bernadine Joselyn, someone I have worked with off and on and who has put real thought into rural policy. Regarding the billions of dollars under Connect America Fund, she was quoted here:
- Those speeds were ‘such a waste of public dollars,’ said Bernadine Joselyn, public policy director for the Blandin Foundation, a Grand Rapids, Minnesota, nonprofit focused on rural issues. ‘If you’re going to make an investment in broadband, you want it to be future proof, especially with public funds. I think it’s reasonable to expect it would benefit a community for decades.’
Heitkamp’s time would be far better used exposing the policies in DC that sent billions to AT&T and bankrupt companies like Frontier that failed to connect rural America. Instead, she is running a national campaign to tank Gigi’s nomination because Gigi dared to suggest that subsidies to rural America should actually benefit rural residents and businesses. Because Gigi also believes that we should balance rural investment with subsidies to cities, where millions more Americans are ignored or poorly served by cable monopolies and where little girls do their homework at Taco Bell in the city of Salinas just like their peers in rural McDonald’s parking lots.
North Dakota once broke free of big monopolies
Here is the savage irony of Heitkamp running down Gigi with this attack. Heitkcamp is positioning herself as the savior of rural America while selling it out to the monopolies that have refused to invest in it. And she does it while knowing that her former constituents in North Dakota won’t be as harmed as the rest of the country because North Dakota is already wired. 77 percent of the rural areas in the state can connect to the Internet via future-proof, fiber networks, compared to just 20 percent of rural Americans as a whole. North Dakota broke free of the big monopolies that refused to invest outside of the cities, when local cooperatives and independent telcos bought the lines from those monopolies decades ago to better serve their subscribers.
Tanking Gigi’s nomination on these grounds sends a message that rural subsidies should continue going to those companies that simply extract wealth from rural areas. Gigi stands to make sure we invest in networks that are accountable to rural communities rather than handing billions to companies that are better at astroturf marketing campaigns than connecting farms with fiber. I understand why the telecom monopolies are frequently happy to bankroll misinformation campaigns to further their interests. I’m confused why so many people are so easily taken by them.
Gigi is deeply respected by the people who oppose damn near everything she does. I want to see Gigi on the FCC for the same reason her opponents do – because she is not the type to sell out for a buck. She is the model for who we need on the FCC.
Editor’s Note: This piece was authored by Christopher Mitchell, director of the Institute for Local Self Reliance’s Community Broadband Network Initiative. His work focuses on helping communities ensure that the telecommunications networks upon which they depend are accountable to the community. He was honored as one of the 2012 Top 25 in Public Sector Technology by Government Technology, which honors the top “Doers, Drivers, and Dreamers” in the nation each year. This piece was originally published on MuniNetworks.org on April 26, 2022, and is reprinted with permission.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to email@example.com. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
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