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In FCC Proceeding, Multiple Groups Recommend New General Tax for Universal Service Fund

Calls in contrast to growing support for a broader mechanism including broadband revenues



Photo of Federal Communications Commissioner Brendan Carr

WASHINGTON, March 17, 2022 – Some organizations are calling for the Federal Communications Commission to turn the onus of financially supporting key programs for expanding basic telecommunications services from service providers to the general public via taxation, according to rolling submissions to the agency.

The rationale is that the communications landscape since the 1997 adoption of the Universal Service Fund, which goes to support multiple high-cost programs for universal broadband, has changed significantly to where all Americans are reliant on more modern communications. And with that, there are calls to reform the program beyond its reliance on dwindling voice service revenues.

“Direct appropriations [general taxation] would be the most straightforward means of spreading the funding requirements for such programs – which benefit all American businesses and consumers – over the broadest and most equitable funding base,” said AT&T in its submission, which has supported such a position previously.

Thursday was the last day to submit comments to the FCC’s study of the future of the USF. The program supports the schools and libraries E-rate subsidy program, the low-income Lifeline program, the Rural Health Care program and the Connect America Fund for rural areas.

But the USF has been operating under an escalating burden that has gone unchanged for decades: Its reliance on voice service revenues – downloaded onto customers – has put stress on the roughly $8-9 billion per year program, which saw a tax that reached a record 33.4 percent of declining voice revenues last year.

“The Commission has placed increased weight on a small subset of communications services and providers with a shrinking subscriber base to achieve the nation’s universal broadband goals,” AT&T added, “in particular, enterprise services offered by legacy telecommunications companies, companies which historically and today are the largest contributors to the Fund.”

The FCC is looking at a dichotomy of recommendations, according to an analysis of the submissions to the FCC: either derive funding for the USF from general taxation or broaden the base of revenue support to broadband revenues generally and/or include other companies that benefit from broadband, including big technology companies.

More support for congressional budget item

Among those organizations supporting a move to shift the burden on general taxation for the USF are the Internet Innovation Alliance, the Cellular Telecommunications Industry Association, the U.S. Chamber of Commerce, and TechFreedom, a non-profit technology think tank.

“Adopting a general appropriations process for broadband programs will help “future proof” these programs to account for new technologies to provide communications services for consumers and businesses,” said the Chamber of Commerce. “The appropriations process allows Congress to better tailor broadband programs on a regular basis to account for changes in the marketplace and new communications technologies. It will also avoid the challenges currently facing the USF.”

But while TechFreedom argued against expanding contribution to big technology companies because the FCC “cannot unilaterally” do that, others in the group supporting a congressional line item said big tech companies should be a target if support cannot come from taxation.

“Short of general revenues,” the CTIA said, “significant elements of the economy, such as digital advertisers, online marketplaces, and streaming services, rely heavily on broadband networks and leverage the availability of broadband service to generate enormous amounts of revenue.”

Added the IIA: “If adding an $8 billion line item to the annual Congressional budget is deemed unworkable, an alternative approach that should be considered is expanding the USF contribution base to include revenues from large internet companies.”

Big Tech must pay

AT&T said if its general tax proposal cannot be adopted, it should look to expand the base to include big technology platforms, whose business models it said “depend on, and now dominate, the internet ecosystem.”

Verizon recommended the commission broaden the base to online platforms with a “specified number of active users or meet certain sales or market capitalization thresholds,” a recommendation made by FCC Commissioner Brendan Carr in a Newsweek op-ed last year that FCC Chairwoman Jessica Rosenworcel called “intriguing” and that received some Republican support. FCC Commissioner Nathan Simington also raised the idea in an interview in September.

The NCTA Rural Broadband Association is similarly recommending that the FCC move toward requiring contributions from large firms “whose video streaming and other “Internet-based businesses depend substantially on the availability and affordability of robust broadband services throughout the country.”

The Coalition of Rural Wireless Carriers, the non-profit Free State Foundation, and a coalition of academics and policy scholars have also called for the opening of the fund to big technology platforms. The academics and policy scholars argued that it’s not fair that consumers or certain telecom companies are burdened by the weight of the USF and instead should be put onto the “half a dozen tech companies…responsible for as much as 80 percent of network traffic at peak time.”

Bring in broadband revenues

As calls for a possible Big Tech tax were emerging, Carol Mattey, a former deputy chief of the Federal Communications Commission, released a report in September calling for the FCC to broaden the base to include broadband revenues. The report was followed up by calls for Congress to stabilize the fund and for the FCC to take immediate unilateral action because, proponents said, the agency had the jurisdiction to do so.

Advocacy group Public Knowledge, trade associations INCOMPAS and USTelecom, the Rural Wireless Association, the Coalition of Rural Wireless Carriers, and non-profit broadband advocate Benton Institute also proposed that the FCC bring in broadband revenues, which some said can be implemented quickly.

Benton, however, went further to caution against general taxation, calling it “ill advised and, indeed, extremely dangerous.

“Even with multiyear appropriations (something which is very difficult to accomplish legislatively for both political and technical reasons), leaving USF to the vagaries of the appropriations process would unquestionably conflict with the established – and essential – objective of maintaining a specific and predictable funding mechanism, and would likely endanger the need to provide sufficient funding as well.”

It was a position supported by Chris Nelson, vice chairman of the South Dakota Public Utilities Commission, who said in a debate about USF reform last year that a general appropriations item would mean the fund’s makeup could swing from year-to-year with lawmaker turnover.


Proposed Rules to Improve National Alert System Unnecessary, Say Critics

Proposed rules to improve EAS security and operational readiness are unnecessary, say commenters.



Photo of Federal Emergency Management Agency

WASHINGTON, January 18, 2023 – Participants to the national public warning system claim that the Federal Communications Commission’s October rulemaking to improve its security and operational readiness will unduly increase resource and monetary burdens on participants. 

The national warning system is composed of the Emergency Alert System, which transmits important emergency information to affected areas over television and radio, and the Wireless Emergency Alert System, which delivers that information to the public on their wireless devices. Participation in the system is voluntary for wireless providers, but radio and television broadcasters are required to deliver Presidential alerts via the EAS. 

In the Notice of Proposed Rulemaking, the FCC sought comment on ways to strengthen the operational readiness of the warning system by requiring EAS participants to report compromises of equipment and WEA participants to annually certify to having a cybersecurity risk management plan in place. It further asked that commercial mobile service providers “take steps to ensure that only valid alerts are displayed on consumer devices,” citing several instances where false alerts were given following a system hack. 

Measures are unnecessary 

Participants argued that such measures are unnecessary in reply comments to the Commission.  

The proposals in the Notice are “unnecessary and will not meaningfully enhance operational readiness or security of EAS,” stated the National Association of Broadcasters in its comments, claiming that the Notice “presents only scant evidence of EAS equipment failures and new security threats, and thus does not justify the myriad measures proposed.” 

Furthermore, NAB claimed, the notice fails to present a clear rationale for how the Commission’s heightened situational awareness would improve EAS readiness. 

ACA Connects, a trade association representing small and mid-sized telecom and TV operators, added that the Notice identifies only two EAS security breaches in the past ten years, which, as the company said, is “hardly an epidemic.” 

Participating mobile service providers have cyber risk management plans in place already, making any separate cyber certification requirement for WEA unnecessary and likely to cause fragmentation of service-specific plans, claimed wireless trade association, CTIA. 

Increased participant burden 

The Federal Emergency Management Agency, which is responsible for national-level activation and tests of the systems, stated in its comments that it is concerned about the potential increased burden placed upon participants. 

EAS participants voluntarily and at no cost provide state and local alerts and mobile service providers voluntarily participate in WEA without compensation. FEMA argued that some stakeholders may “have difficulty justifying additional resources necessary to comply with increasing regulation.” 

The proposed reporting, certification, and cyber management obligations are far too complex for many EAS participants to implement, stated NAB, claiming that the Commission’s estimation of costs are “wildly unrealistic,” not considering additional hires such a plan would require. 

Mobile provider AT&T added that requirements for updating cybersecurity plans would divert valuable resources from the ongoing, broad cybersecurity efforts that participants engage in daily. The proposed authentication would inhibit the timely release of critical emergency alerts without completely eliminating false WEA messages, it continued.  

The Center for internet Security, however, supported the FCC’s proposed actions, claiming that it moves forward with “critically important” measures to protect the nation’s alert systems from cyber threats. 

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CES 2023: Commissioner Starks Highlights Environmental Benefits of 5G Connectivity

Starks also said federal housing support should be linked to the Affordable Connectivity Program.



Photo of FCC Commissioner Geoffrey Starks (left) and CTA’s J. David Grossman

LAS VEGAS, January 7, 2023 – Commissioner Geoffrey Starks of the Federal Communications Commission spoke at the Consumer Electronics Show Saturday, touting connectivity assistance for individuals who benefit from housing assistance as well as the potential environmental benefits of 5G.

The FCC-administered Affordable Connectivity Program subsidizes monthly internet bills and one-time devices purchases for low-income Americans. Although many groups are eligible – e.g., Medicaid and Supplemental Nutrition Assistance Program enrollees – Starks said his attention is primarily on those who rely on housing support.

“If you are having trouble putting food on your table, you should not have to worry about connectivity as well,” Starks said. “If we are helping you to get housed, we should be able to connect that house,” he added.

Environmental benefits of 5G

In addition to economic benefits, 5G-enabled technologies will offer many environmental benefits, Starks argued. He said the FCC should consider how to “ensure folks do more while using less,” particularly in the spheres of spectral and energy efficiency.

“This is going to take a whole-of-nation (approach),” Starks said. “When you talk to your local folks – mayors – state and other federal partners, making sure that they know smart cities (and) smart grid technology…making sure that we’re all unified on thinking about this is exactly where we need to go to in order to drive down the carbon emissions.”

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FCC Commissioners Tout 5G, Spectrum and Permitting Reform

Commissioner Geoffrey Starks argued that expanding connectivity would enable sustainable, environmentally-friendly technologies.



Photo of FCC Commissioner Geoffrey Starks

WASHINGTON, December 15, 2022 – High-level Federal Communications Commission officials addressed the 40th Annual Institute on Telecommunications Policy and Regulation on Thursday, touting 5G technologies, increased spectrum access, and permitting reform as the broadband industry braces for what promises to be an action-packed 2023.

In his keynote, Commissioner Geoffrey Starks argued that expanding connectivity would enable sustainable, environmentally friendly technologies such as 5G-enabled precision agriculture. During a subsequent panel, Joel Taubenblatt, acting chief of the FCC’s Wireless Telecommunications Bureau, predicted robust innovation in 5G-powered technology sectors including transportation, energy and finance.

Starks, Taubenblatt, and Commissioner Brendan Carr each voiced support for robust spectrum availability. Carr reiterated his outspoken opposition to popular social-media app TikTok, and earlier in the day, Commissioner Nathan Simington proposed raising cybersecurity requirements on wireless device manufactures.

The Infrastructure, Investment and Jobs Act allocated $65 billion to broadband, the largest single investment to date. Policymakers and industry leaders have voiced concern that regulatory mismanagement could blunt the funds’ impact. Testifying before a U.S. Senate subcommittee Tuesday, representatives from trade groups US Telecom and NCTA – The Internet & Television Association warned lawmakers against onerous regulation, especially opaque permitting processes on federal lands.

To ensure the efficient use of unprecedented broadband funding initiatives, federal and state authorities should streamline permitting processes, Carr said. The commissioner told Broadband Breakfast he supports expanding small cell infrastructure reforms, such as approval shot clocks and limitations on unreasonable fees, to the wireline sector.

Carr, in his featured remarks, said regulators should craft policy to avoid overbuilding and prioritize building to the least unserved communities. He once again advocated tech-neutral policies that allow fixed-wireless and satellite broadband to fairly compete with fiber.

Permitting and access barriers at multiple levels of government

Representatives from broadband industry groups detailed potential regulatory barriers to deployment in a webinar held Wednesday.

At the local level, providers must obtain access to utility poles, which can be owned by a range of entities including municipalities and utility companies. State broadband offices could likely coordinate with providers and regulators to ease this process, suggested Teresa Ferguson, senior director of broadband and infrastructure funding at the National Rural Telecommunications Cooperative.

At the federal level, Congress has signaled interest in streamlining permitting processes, said Angela Simpson, general counsel and vice president of legal and regulatory affairs at the Competitive Carriers Association, noting the body introduced 28 reform bills this session. Earlier this month, a bipartisan coalition of senators wrote to the U.S. Departments of Interior, Agriculture, and Commerce, urging them to update federal permitting guidelines.

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