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Big Bucks for Broadband in the Balance: Explaining the Affordable, Accessible Internet for All Act

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Photo of now-Sen. Brian Schatz, one of the sponsors of the Accessible, Affordable Internet for All Act, from December 2010 by Kyle Nishioka used with permission

If you have been following our series on the Accessible, Affordable Internet for All Act, you already know the proposed legislation calls for a $100 billion investment in expanding broadband access and affordability in unserved and underserved parts of the country.

In this fourth installment of the series, we explore the part of the bill that contains the bulk of the funding. Of the $100 billion proposed in the bill, $85 billion of it can be found in the Title III – Broadband Access section.

Amending the Communications Act of 1934, Section 3101 of the bill appropriates $80 billion for “competitive bidding systems” to subsidize broadband infrastructure. That is to say, it requires the Federal Communications Commission, and states, to use “competitive bidding systems” for Internet Service Providers to bid on broadband deployment projects in “areas with service below 25/25 Megabits per second (Mbps), and areas with low-tier service, defined as areas with service between 25/25 and 100/100 Mbps.”

The term “competitive bidding” seems to suggest a reverse auction process, though it hardly makes sense for each state to set up such a system given the logistical challenges. A legislative staffer responded to our email earlier this year saying he believed that language would allow for state programs that solicited applications from ISPs and scored them for evaluation, much like Minnesota’s Border-to-Border Broadband program operates. However, he noted that the FCC would interpret that language ultimately. More on this below.

Prioritizing Higher Upload Speeds

It’s worth noting that this part of the bill implicitly acknowledges the insufficiency of the current FCC definition of a minimum broadband speed of 25/3 Mbps. As it stands now, the FCC defines “unserved areas” as parts of the country where there is either no Internet access or broadband speeds under 25/3.

This legislation raises the bar and broadens the definition of “unserved areas.” It’s a step in the right direction, as there’s widespread support among broadband advocates for increasing the FCC definition of minimum broadband speeds to at least 100/100 Mbps.

By prioritizing higher upload speeds, as this bill does, it makes all the old, outdated copper wire technology irrelevant. In other words, to get the job done as called for in this legislation would require fixed wireless, fiber optics, or recent cable DOCSIS standards.

The $80 billion appropriated in this section creates two separate major sources of funding. It stipulates that 75% of the funds, or $60 billion, be dedicated for a national competitive bidding system for broadband deployment in unserved areas and low-tier service areas.

The other 25%, or $20 billion, would be used for states to set up competitive bidding systems for broadband deployment in, not only unserved and low-tier service areas (service between 25/25 and 100/100 Mbps), but also for underserved anchor institutions (schools, libraries, healthcare facilities, museums, public safety offices, or public housing agencies) with speeds less than 1 gigabit per 1,000 users.

The bill also allows for a state that does not have “unserved areas” or areas with “low-tier service,” for funding to be used for broadband deployment in areas with mid-tier service defined as more than 100/100 Mbps but less than 1 gigabit per second symmetrical.

In both the national and state competitive bidding systems, the legislation further requires that 20% of the funds ($12 billion for the national system and $4 billion for the state system) be used to deploy broadband that delivers 1 Gigabit per second symmetrical speeds. This strikes us as smart because as bandwidth demand continues to rise, it would be a waste of taxpayer dollars to fund broadband networks that rapidly become obsolete. Historically, WISPs may have objected to this, but since the Rural Digital Opportunity Fund (RDOF) rural auction, they seem confident in being able to deliver that capacity widely.

Funding Priority Preferences  

Additionally, the bill goes on to specify funding priority preferences, the most important being projects that expand access to broadband service in areas where at least 90 percent of the population does not have access to 25/3 broadband service.

Other funding priority preferences include projects that would expand broadband access in “persistent poverty counties” and on Tribal lands. We believe it is crucial to set specific funds aside to deal with the historical refusal to invest in telecommunications infrastructure in Indian Country.

Another preference is for projects that would deploy open-access networks, which is a single high-quality network (fiber or wireless) that multiple ISPs can use to compete for customers. It’s a way of introducing competition in a market dominated by monopoly interests – a throwback to the days of dial-up when everyone used the same telephone wires to connect to the Internet and multiple ISPs competed for customers.

Not So Fast

While federal investment in broadband infrastructure is unquestionably needed (considering the failure of private ISPs to provide adequate, affordable and reliable Internet access to all) here’s where things get dicey as it relates to this major funding section of the AAIA, a part of the legislation that looked much better on paper before we saw what happened with the FCC’s recent RDOF auction that left many expert observers puzzled.

RDOF auctioned large swaths of rural areas of the U.S. that have no broadband access. Up to $16 billion was at stake though the auction will actually disperse some $9+ billion dollars because many areas were bid well below what was expected and to the point where some were bid down so far that it is almost certainly not economical to build.

In a nutshell, much of RDOF funding went to ISPs for projects where many familiar with the industry question whether they have the capacity to deliver. As our own Christopher Mitchell, who has been closely analyzing RDOF, notes: “RDOF should not give any faith that a national competitive auction is a good way to subsidize. I would not want to see an auction with so much more money after RDOF until we know the FCC can properly vet bidders. It’s probably the right amount of money (in AAIA) but it should be distributed over multiple years with local input.”

It’s not that the competitive bidding system envisioned in the legislation is inherently flawed, but in light of RDOF, it highlights the importance of ensuring the auction rules are fine-tuned, part of which should provide for local government to have a say in which ISPs do the work in their respective communities. In fact, it would make sense to revise the language in this bill to give preference for projects that are endorsed by the local governments in the project area.

Another item missing from the funding priority preferences section is one that preferences cooperatives and municipal governments looking to build locally-accountable networks. A preference for cooperatives and local governments makes sense primarily because they are directly responsible to local citizens in ways private companies often are not.

Infrastructure Bank

None of this should give the impression that local governments or public entities are completely overlooked in this bill. In fact, Section 3201 of the bill, would establish a $5 billion Broadband Infrastructure Financing Innovation (BIFIA) program. We’re talking about an infrastructure bank that would be administered by the National Telecommunications and Information Administration (NTIA) to provide state and local governments, public authorities, and public-private partnerships financial assistance in the form of secured loans, lines of credit, and loan guarantees.

To be eligible, the legislation requires the NTIA to determine that BIFIA funding for the project do three things: (a) foster partnerships to attract private and public investment for the project; (b) enable the project to proceed at an earlier date than the project would otherwise be able to proceed; and (c) reduce the Federal contribution for the project. Preference will be given for open access projects.

Section 3210 requires the Assistant Secretary of Commerce for Communications and Information to report to Congress one year after the bill is enacted and every two years thereafter “summarizing the financial performance of the projects that are receiving, or have received, assistance under the BIFIA program, including a recommendation as to whether the objectives of the BIFIA program are best served by [either] continuing the program under the authority of the Assistant Secretary; or establishing a Federal corporation or federally sponsored enterprise to administer the program.”

The final part of the “Title III – Broadband Access” portion of the bill, Section 3301, is unrelated to building broadband networks but would extend the E-rate program to include providing Wi-Fi access on school buses. No dedicated funds are appropriated for this as the legislation anticipates the funding would come from E-rate, which another section of the bill seeks to appropriate an additional $5 billion to expand broadband access for students off-campus as the existing E-rate program only provides for on-campus connectivity.

Our next installment in this series will look at the last three “Titles” of the bill: Title IV – Community Broadband; Title V – Broadband Infrastructure Deployment; and Title VI – Repeal of Rule and Prohibition on Use of NPRM.

Editor’s Note: This piece was authored by Sean Gonsalves, a senior reporter, editor and researcher for the Institute for Local Self Reliance’s Community Broadband Network Initiative. Originally published on MuniNetworks.org, the piece is part of a collaborative reporting effort between Broadband Breakfast and the Community Broadband Networks program at ILSR.

Sean Gonsalves is a longtime former reporter, columnist, and news editor with the Cape Cod Times. He is also a former nationally syndicated columnist in 22 newspapers, including the Oakland Tribune, Kansas City Star and Seattle Post-Intelligencer. His work has also appeared in the Boston Globe, USA Today, the Washington Post and the International Herald-Tribune. An award-winning newspaper reporter and columnist, Sean also has extensive experience in both television and radio. Sean has made appearances on WGBH’s “Greater Boston” TV show with Emily Rooney and was a frequent guest on New England Cable News (NECN), commentating on a variety of Cape Cod tourist attractions. He left print journalism in 2014 to work as a senior communication consultant for Regan Communications and Pierce-Cote, advising a variety of business, non-profit and government agency clients on communication strategy. In October 2020, Sean joined the Institute for Local Self Reliance staff as a senior reporter, editor and researcher for ILSR’s Community Broadband Network Initiative.

Digital Inclusion

Virt Seeks To Serve As The Hub To Find And Join Virtual Events

Launched last week, virt.com hopes to take advantage of the rise in virtual events by crowdsourcing them in one place.

Tim White

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Photo of GHS co-founder Victor Zonana, left, from Global Health New Zealand

April 13, 2021 – Global Health Strategies, the global advocacy group focused on health and policy, last week launched Virt.com, a new open-source media platform that crowdsources virtual events on various issues.

Those “issue channels” include health, Covid-19, climate and environment, gender, food and nutrition and human rights. It relies on users in different regions posting about upcoming events in those categories.

The launch last week coincided with a new ad campaign called Unmutetheworld, focused on digital equity around the world with the belief that internet access is a human right. It includes partnering with groups like National Digital Inclusion Alliance and grassroots organizations in many different countries.

“The pandemic has transformed our lives. The way we connect, the way we celebrate, the way we mourn, the way we work, access healthcare and learn, has changed,” GHS CEO David Gold said in an interview. “Broadband allows us to connect virtually even during the pandemic, but so many people don’t have access to the internet, they cannot connect, and we have to change that,” he said.

Gold described Virt as a way to connect people globally to meaningful conversations about health, science, policy, technology, among other topics. “We have a window of opportunity right now with the pandemic to really change. Despite all the terrible effects of COVID-19, we have this moment in time to make the case for big investments,” he said.

Gold highlighted the work of GHS and the Unmutetheworld campaign to connect people across different nations. “Broadband access comes to the heart of economic development, we have to take that momentum in the U.S. and expand it around the world,” he said.

Broadband is becoming increasingly more important, with more people working, schooling, or using health services virtually than ever before due to the pandemic.

Broadband central to digital activities

“Broadband used to be a ‘nice to have,’ now it is a ‘must have,’” Angela Siefer, executive director at NDIA, said in an interview. “Twenty years ago, we were worried about having enough computers in a classroom and lucky that one of them connected to the internet, but that has changed now, and we need to keep up with the technology. It permeates our whole lives,” she said.

President Joe Biden recently announced a new $2.3-trillion infrastructure proposal called the American Jobs Plan, which includes $100 billion for broadband programs over eight years. Congress has also recently introduced legislation on broadband initiatives, including $100 billion as part of the Leading Infrastructure for Tomorrow’s America Act, or LIFT America Act, sponsored by the Democratic delegation on the House Energy and Commerce Committee.

“We are excited about the potential of these government initiatives, not just for funding deployment, but also to address affordability, digital literacy skills and devices,” Siefer said. “We’ve never had this much awareness about broadband issues. We’re seeing real ideas being put into action.”

Siefer also mentioned state-level efforts to expand broadband, including recent legislation in New York and Maryland. Maryland plans to spend $300 million of federal funding from the American Rescue Plan on broadband programs, including infrastructure, subsidies for fees and devices, and grants for municipal broadband. New York state recently announced the 2022 fiscal year budget including a $300 billion infrastructure package that contains broadband subsidies for low-income residents and an emergency fund to provide economically-disadvantaged students with free internet access.

“We’re seeing a shift to address adoption and affordability at both the state and federal level, where previously we only saw discussion of availability,” Siefer said. “It’s not just about unserved and underserved areas when it comes to digital equity, because the infrastructure might be there, but people are not participating in broadband for a variety of reasons,” she said. “Affordability and digital literacy lock people out. New programs aim to solve that problem and get people connected.”

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Digital Inclusion

Starry and Non-Profit PCs for People Seek Affordable Connectivity, Affordable Devices and Digital Literacy

Benjamin Kahn

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Photo of Starry Senior Vice President Virginia Adams from Public Knowledge

March 19, 2021—Broadband provider Starry Inc. and the non-profit group PCs for People launched a joint effort aimed at deploying affordable, robust, broadband coverage alongside discounted computer hardware to families living in public housing in Denver, Colorado.

Starry, a fixed wireless broadband provider based in Boston, Massachusetts, operates in 25 states, including Colorado. PCs for people attempts to improve digital inclusion by helping low-come communities secure low-cost internet access and computers.

The two organizations announced a partnership Tuesday to provide subscribers to Starry’s Connect service a $25 coupon that can be redeemed during the purchase of a computing device from PCs for People.

A study published by Pew Research in 2019 stated that 10 percent of Americans do not use the internet. More than half of that demographic stated that they did not use the internet because securing a connection was too difficult or the cost of doing so was prohibitive.

The COVID-19 pandemic has exacerbated the issue because students and others who utilized internet through schools or libraries were likely unable to access it during parts of the pandemic.

“In order to truly achieve digital equity and inclusion across our communities, we must bring together three critical components: Affordable connectivity, affordable devices and digital literacy,” said Virginia Lan Abrams, senior vice president of government affairs and strategic advancement for Starry.

Abrams said that the joint venture will be a step towards shortening the digital divide. Without affordable connectivity, affordable devices and digital literacy, the internet has less value to low-income households, she said.

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Digital Inclusion

California Tech Fund Wants to Use Public Private Partnerships to Close Digital Divide

Derek Shumway

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Photo of Sunne Wright McPeak

March 8, 2021 – The California Emerging Technology Fund, a nonprofit foundation focused on digital equity in the state, called on internet service providers and business leaders to form public-private partnerships to close the digital divide under President Joe Biden.

“America can close the Digital Divide in the first term of the Biden Administration if the federal government can encourage Internet Service Providers (ISPs) through strategic investments to build broadband infrastructure in remote rural communities, including Tribal Land communities and improve woefully inadequate networks in high-poverty, densely populated urban neighborhoods,” said CETF CEO Sunne Wright McPeak.

“It is essential that business leaders and major employers support cost-effective solutions and sincere public-private partnerships that require ISPs to step up or step aside,” she said.

CETF CEO McPeak participated in the Broadband Breakfast Live Online ‘Champions of Broadband’ series. See “From the View of the California Emerging Technology Fund, Presidential Leadership Needed on Broadband,” Broadband Breakfast, October 16, 2020

CETF recommends the findings in the U.S. Council on Competitiveness Report, Competing in the Next Economy, which calls for authorizing a federal investment on the order of $100 billion for both broadband deployment and adoption, including digital skills development.

CETF said it commends the Business Roundtable for recognizing the immediate imperative to close the digital divide, which has been exposed by the pandemic as a digital cliff, with families falling off into deeper poverty and greater isolation.

Immediate investment by the federal government in partnership with states will not only address the digital disparities which are rooted in systemic racism, but will also provide a big stimulus to jumpstart economic recovery and will result in significant increases to gross domestic product and relative global economic productivity, the organization said.

However, the federal government should focus on investing its limited resources to support sustainable solutions, the CETF said, urging the Business Roundtable to go further in its call to action to seek “sincere public-private partnerships” instead of providing subsidies to ISPs.

In addition to the call to action, CETF is releasing the Digital Equity Bill of Rights, which describes principles and values developed over 15 years of collaborating with top national and state leaders in government, coupled with on-the-ground partnerships with regional, local and school leaders, civic organizations, business leaders, and several hundred community-based organizations.

CETF policy recommendations also are included in the California Broadband for All Action Plan, which emerged from an executive order by Governor Gavin Newsom to expand high-speed Internet deployment and adoption.

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