DALLAS, March 31, 2023 —Tribal lands remain among the areas in the United States that most lack broadband access, but an influx of federal funding could help to close the divide if Tribes are able to build successful partnerships and navigate a challenging grant application process, according to speakers at Connected America on Wednesday.

“We’ve been promised for decades by the biggest carriers in the world that they’re going to bring good connectivity to southeastern rural Oklahoma, and they haven’t,” said Rob Griffin, Tribal broadband coordinator for the Choctaw Nation of Oklahoma. “They’ve failed, so we’ve worked with regional operating carriers, we’ve worked to build our own fiber networks, and we’re working to gain access to applications and grants over the next couple of years to work with other ISPs and other regional operating carriers.”

Much of this development is being bolstered by federal funding. On March 23, the National Telecommunications and Information Administration announced two new grants through the Tribal Broadband Connectivity Program, bringing its total to more than $1.75 billion awarded to 135 Tribal entities.

Several Tribal entities are also hoping for funding through the Broadband Equity, Access and Deployment program, although the map being used to allocate BEAD funds has been criticized for inaccurately representing Tribal areas.

Although the federal grants present a significant opportunity, Griffin noted that the lengthy application process can be a barrier, particularly for Tribes with limited resources.

Smaller Tribes “might have a part-time IT person if they’re lucky… They don’t have technical resources,” agreed Lisa Hanlon, CEO of the Teltech Group and Cherokee Nation citizen.

Another layer of complexity comes from the number of different federal agencies offering grant funding, each with their own specific requirements and nuances, said Paul Narro, director of public policy for local internet service provider TekWav.

As the grant programs continue, Hanlon advocated for Tribal entities to work with local providers to maximize federal funding, benefiting both parties. In order for such partnerships to be successful, she said, providers must understand the structure of the specific Tribal nation they are working with and then to listen to what the Tribal leaders actually want.

Griffin advised providers to take a long-term approach to working with Tribal nations.

“We’re thinking in terms of how to build things for the next 100 years,” Griffin said. “And when you think like that, your economies of scales are different and your planning stages are different. So if you’re in the process of working with a Tribal nation, just gear your thinking around, ‘How can I help this Tribe and really build a partnership over the next 20, 40, 60 and 100 years?’”

WASHINGTON, March 29, 2023 – A bill introduced in both chambers Tuesday would require the Federal Communications Commission to study and make rules on expanding the funding base of the Universal Service Fund.

The Reforming Broadband Connectivity Act of 2023 – a previous version of which was introduced two years ago – would require the FCC within one year of the enactment of the bill to solidify rules to reform how the fund is supported and within 120 days to conduct a study on the need to broaden the fund’s base and submit the report to Congress.

The contents of the bill should include the “relative equities and burdens” of the changes on consumers, businesses and seniors, who often bear the brunt of the cost of support because the fund is currently supported by landlines.

The House version was introduced by Lizzie Fletcher, D-TX, Joe Neguse, D-CO, and Angie Craig, D-MN, and the Senate companion was introduced by Amy Klobuchar, D-MN, and John Thune, R-S.D.

“Ensuring broadband service in the most remote, hardest-to-serve areas requires a sustainable Universal Service Fund with a sustainable funding formula,” Brandon Heiner, senior vice president of government affairs at industry association USTelecom, said in a statement. “Senators Amy Klobuchar (D-Minn.) and John Thune (R-S.D.) recognize that the contribution mechanism must be reformed to preserve connectivity for rural Americans. Directing the FCC to initiate a rulemaking to expand the contributions base will help secure the future of universal service.”

The bill’s introduction follows an FCC report to Congress that requested the legislative body provide the commission with the authority to change the fund’s contribution base.

The USF, which includes four high-cost programs supporting basic telecommunications services for institutions and low-income Americans, receives roughly $9 billion a year from voice service providers, whose revenue base has been dwindling for years.

The reliance on those providers has called into question the fund’s sustainability. Various experts have proposed different remedies, including expanding the base to include contributions from broadband service providers, large technology platforms, and from the general taxation pool.

Prior to the FCC’s report to Congress, some experts argued that the commission can unilaterally expand the fund’s base. Those same experts warned that Congress may take too long to implement necessary legislation.

On Friday, an appeals court denied a petition that challenged the FCC’s authority to raise funds and subdelegate the work of coming up with the quarterly contribution amounts providers must pay into it. The petition must go through two more levels of appeal.

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.