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Broadband's Impact

25 Years After Passage, Architects of the Telecom Act Say Congress Should Revisit the Law

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Photo of Larry Irving from May 2007 by Ed Kohler used with permission

February 8, 2021—On the 25th anniversary of the Telecommunications Act of 1996, Congresswoman Anna Eshoo, D-Calif. and Sen. Ed Markey, D-Mass., said that Congress should revisit the law to address modern demands for broadband and bringing service to underserved communities.

The Telecom Act had many authors, one of whom was then-Rep. Markey. Speaking during a pre-recorded video released Monday by the Federal Communications Commission, he said that the law was designed to improve the quality of service and range of coverage of broadband by promoting competition and reducing regulation. The 1996 law was the most significant revision of the Communications Act since its passage in 1934.

During the FCC video, titled “Commemorating 25 Years of the Telecom Act,” Markey urged that the next 25 years should be defined by “bold action” to establish consumer-friendly policies to protect users and grow the economy, much like the 1996 law.

Also speaking in the video were FCC Acting Chairwoman of the FCC Jessica Rosenworcel, plus a bevy of past and present policy-makers, including House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., Rep. Debbie Dingell, D-Mich., Rep. Fred Upton, D-Mich., former Assistant Secretary of Commerce for Communications and Information and NTIA Administrator Larry Irving, and Former FCC Chairman Reed Hundt.

Hundt said the act was crafted with two primary considerations: Enhancing productivity and improving technological benefits. He paid special attention to the Schools and Libraries Program of the Universal Service Fund, commonly known as the E-Rate.

The E-Rate provides discounts to schools and libraries to assist them in obtaining broadband access, “Since [1996], more than $100 billion dollars has been donated to internet access in classrooms and libraries,” Hundt explained, “It was really important that the internet be the first innovation in education since chalk that was distributed equally to everybody in the country regardless of where they lived.”

Following the release of the video, Rosenworcel participated in a Twitter chat with educator and Rep. Jahana Hayes, D-Conn., who said the pandemic highlighted and exacerbated the situation surrounding broadband coverage.

“We need connections now more than ever,” she said in a Tweet. “We need to expand [the E-Rate] beyond schools and into the homes of students as so many kinds are learning remotely during this pandemic.”

New legislation introduced Monday by Markey and Eshoo, dubbed the National Broadband Plan for the Future Act, aims to address these inequities.

“The lack of universal access to affordable and high-speed internet worsens the existing inequities in society,” said Eshoo. Telehealth, remote working, and remote learning during the ongoing pandemic are prime examples of why broadband coverage and quality must be improved, she said.

Markey, who spoke live earlier in the day about the Telecom Act at an INCOMPAS event, said he was proud of his record in co-authoring the law. But, he said, “we still have a way to go before we finish the job. We are seeing more than ever how necessary robust and affordable broadband is to the future of American life, education, jobs, and medical care.”

See “Telecom Act Boosters at INCOMPAS Summit Urge Broadband Boost and Net Neutrality Revival,” Broadband Breakfast, February 8, 2021

Broadband's Impact

House Bill to Make Broadband Grants Non-Taxable Introduced

Sen. Mark Warner said last month he is working to pass a companion bill by year’s end.

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Photo of Rep. Mike Kelly, R-Penn.

WASHINGTON, December 7, 2022 – Reps. Mike Kelly, R-Penn., and Jimmy Panetta, D-Ca., on Wednesday introduced the Broadband Grant Tax Treatment Act, the companion of a Senate bill of the same name, which would make non-taxable broadband funding from the Infrastructure Investment and Jobs Act and the American Rescue Plan Act.

The bill’s supporters say it will increase the impact of Washington’s broadband-funding initiatives, the largest of which is the IIJA’s $42.45 billion Broadband Equity, Access, and Deployment program. The IIJA allocated a total of $65 billion toward broadband-related projects.

Kelly said the proposal “ensures federal grant dollars, especially those made available to local governments through pandemic relief funding, will give constituents the best return on their investment.”

“This legislation allows for existing grant funding to be spent as effectively as possible,” Kelly added.

Sen. Mark Warner, D-Va., sponsored Senate’s version of the bill in September and said last month he is working to push it through by year’s end.

“Representative Panetta’s and Kelly’s bill to eliminate the counter-productive tax on broadband grants is right on the money,” said Jonathan Spalter, president and CEO of trade group US Telecom. “Closing the digital divide in America – especially in our hardest-to-reach rural communities – will require every cent of the $65 billion Congress has dedicated for that critical purpose.”

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Digital Inclusion

Broadband is Affordable for Middle Class, NCTA Claims

According to analysis, the middle class spends on average $69 per month on internet service.

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Photo of Rick Cimerman, vice president of external and state affairs at NCTA

WASHINGTON, November 22, 2022 – Even as policymakers push initiatives to make broadband less expensive, primarily for low-income Americans, broadband is already generally affordable for the middle class, argued Rick Cimerman, vice president of external and state affairs at industry group NCTA, the internet and television association. 

Availability of broadband is not enough, many politicians and experts argue, if other barriers – e.g., price – prevent widespread adoption. Much focus has been directed toward boosting adoption among low-income Americans through subsidies like the Affordable Connectivity Program, but legally, middle-class adoption must also be considered. In its notice of funding opportunity for the $42.5-billion Broadband Equity, Access, and Deployment program, the National Telecommunications and Information Administration required each state to submit a “middle-class affordability plan.”

During a webinar held earlier this month, Cimerman, who works for an organization that represents cable operators, defined the middle class as those who earn $45,300–$76,200, basing these boundaries on U.S. Bureau of Labor statistics for 2020. And based on the text of an Federal Communications Commission action from 2016, he set the threshold of affordability for broadband service at two percent of monthly household income.

According to his analysis, the middle class, thus defined, spends on average $69 per month on internet service. $69 is about 1.8 percent of monthly income for those at the bottom of Cimerman’s middle class and about 1.1 percent of monthly income for those at the top. Both figures fall within the 2-percent standard, and Cimerman stated that lower earners tended to spend slightly less on internet than the $69-per-month average.

Citing US Telecom’s analysis of the FCC’s Urban Rate Survey, Cimerman presented data that show internet prices dropped substantially from 2015 to 2021 – decreasing about 23 percent, 26 percent, and 39 percent for “entry-level,” “most popular” and “highest-speed” residential plans, respectively. And despite recent price hikes on products such as gas, food, and vehicles, Cimerman said, broadband prices had shrunk 0.1 percent year-over-year as of September 2022.

Widespread adoption is important from a financial as well as an equity perspective, experts say. Speaking at the AnchorNets 2022 conference, Matt Kalmus, managing director and partner at Boston Consulting Group, argued that providers rely on high subscription rates to generate badly needed network revenues.

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Broadband's Impact

Federal Communications Commission Mandates Broadband ‘Nutrition’ Labels

The FCC also mandated that internet service provider labels be machine-readable.

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Federal Communications Commission Chairwoman Jessica Rosenworcel

WASHINGTON, November 18, 2022 – The Federal Communications Commission on Thursday afternoon ordered internet providers to display broadband “nutrition” labels at points of sale that include internet plans’ performance metrics, monthly rates, and other information that may inform consumers’ purchasing decisions.

The agency released the requirement less than 24 hours before it released the first draft of its updated broadband map.

The FCC mandated that labels be machine-readable, which is designed to facilitate third-party data-gathering and analysis. The commission also requires that the labels to be made available in customers’ online portals with the provide the and “accessible” to non-English speakers.

In addition to the broadband speeds promised by the providers, the new labels must also display typical latency, time-of-purchase fees, discount information, data limits, and provider-contact information.

“Broadband is an essential service, for everyone, everywhere. Because of this, consumers need to know what they are paying for, and how it compares with other service offerings,”  FCC Chairwoman Jessica Rosenworcel said in a statement. 

“For over 25 years, consumers have enjoyed the convenience of nutrition labels on food products.  We’re now requiring internet service providers to display broadband labels for both wireless and wired services.  Consumers deserve to get accurate information about price, speed, data allowances, and other terms of service up front.”

Industry players robustly debated the proper parameters for broadband labels in a flurry of filings with the FCC. Free Press, an advocacy group, argued for machine-readable labels and accommodations for non-English speakers, measures which were largely opposed by trade groups. Free Press also advocated a requirement that labels to be included on monthly internet bills, without which the FCC “risks merely replicating the status quo wherein consumers must navigate fine print, poorly designed websites, and byzantine hyperlinks,” group wrote.

“The failure to require the label’s display on a customer’s monthly bill is a disappointing concession to monopolist ISPs like AT&T and Comcast and a big loss for consumers,” Joshua Stager, policy director of Free Press, said Friday.

The Wireless Internet Service Providers Association clashed with Free Press in its FCC filing and supported the point-of-sale requirement.

“WISPA welcomes today’s release of the FCC’s new broadband label,” said Vice President of Policy Louis Peraertz. “It will help consumers better understand their internet access purchases, enabling them to quickly see ‘under the hood,’ and allow for an effective apples-to-apples comparison tool when shopping for services in the marketplace.”

Image of the FCC’s sample broadband nutrition label

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