Expert Opinion
Sean Gonsalves: Illinois and Possibly New York Are Poised to Fumble Federal Broadband Funds
Some state laws, as written, may run counter to IIJA language and constrain the use of federal funds.

Now that the fight over federal funding to expand broadband access has been largely settled with the passage of the American Rescue Plan Act and the Infrastructure Investment and Jobs Act, states and local communities are preparing to put those funds to work.
The President Joe Biden administration had initially hoped to tip the scales in favor of building publicly-owned broadband networks as the best way to boost local (more affordable) Internet choice, and inject competition into a market dominated by monopoly incumbents. And while the Treasury rules on how ARPA money can be spent does give states and local governments the ability to do just that, the rules for how the IIJA’s Broadband Equity, Access, and Deployment program can be spent have yet to be finalized by the National Telecommunications and Information Administration, the agency in charge of allocating those funds to the states.
Predictably, the big monopoly incumbents are focusing their lobbying efforts on state lawmakers as states funnel those federal funds into state broadband grant programs. In some states, Big Telco is getting the desired result: the shunning of publicly-owned network proposals to shield monopoly providers from competition. Of course, we expected some states – especially those with preemption laws that either erect barriers to municipal broadband or outright ban such networks – to shovel most of their federal broadband funds to the big incumbents, even though they have a long track record of over-promising and under-delivering.
But while we might expect Florida and Texas to favor the private sector and stealthily move to shut out projects that are publicly-owned, we’re surprised that the first place it’s happening is actually Illinois and New York.
Illinois lawmakers thumb nose at federal law
In January, Illinois Democratic State Senator Patrick Joyce introduced legislation in the Illinois general assembly known as the Illinois Broadband Deployment, Equity, Access, and Affordability Act of 2022 (SB 3683).
As recently detailed by Kevin Taglang, executive editor at the Benton Institute for Broadband and Society, the bill is “rumored to be on a fast track to approval and attempts to establish the exclusive processes the state will use to distribute grant funds Illinois receives from the National Telecommunications and Information Administration through the Infrastructure Investment and Jobs Act. Although SB 3683 includes some of the same findings that Congress included in the Infrastructure Investment and Jobs Act, State Senator Joyce proposes constraints on the use of federal funds that fly in the face of the clear language of federal law.”
The Illinois’ Broadband Advisory Council is dominated by Big Telco with council members representing Frontier, Verizon, Metro Communications, Comcast, and AT&T.
So it shouldn’t come as a surprise that, according to the bill summary, the state’s Department of Commerce and Economic Opportunity would be tasked with implementing a statewide broadband grant program that proposes the state “shall use money from the grant program only for the exclusive purpose of awarding grants to applicants for projects that are limited to the construction and deployment of broadband service into unserved areas” and that the state “shall not award grant money to a governmental entity or educational institution.”
That language alone validates Taglang’s assessment that this bill is a recipe for “How a State Can Blow a Once-in-a-Generation Investment to Close the Digital Divide.”
While the IIJA doesn’t have a preference for publicly owned and cooperative projects (as the Biden Administration initially wanted), it does explicitly say that states cannot exclude cooperatives, nonprofit organizations, public utilities, or local governments from being eligible as grant recipients.
For that reason alone, as Taglang notes with blunt concision:
“If Illinois adopts this law, it risks losing access to over one billion dollars of federal support for broadband deployment.”
The IIJA does say that the money from the NTIA’s BEAD program must first be used to deploy networks in “unserved” areas (areas that do not have access to broadband with minimum download and upload speeds of 25/3 Megabits per second). However, after those areas have been addressed, current statute says that the money can, and should be, then used to deploy networks in “underserved” areas (areas that do not have access to 100/20 Mbps connections).
The federal infrastructure bill also says the money can be specifically used to build-out to multi-dwelling units where Internet service affordability is an issue and to community anchor institutions such as educational institutions, which the proposed Illinois legislation would expressly forbid.
It strains credulity to think that State Sen. Joyce and the 14 other state lawmakers who have signed on as co-sponsors do not know that provisions of their bill run counter to the clear language in the IIJA. (To understand how NTIA can navigate this challenge, don’t miss our interview with Nancy Werner, general counsel of NATOA.)
What these state lawmakers are likely not telling their constituents is that if their bill passes, the state will jeopardize hundreds of millions in federal funds to improve broadband access and leave them at the mercy of monopoly providers that have failed to deliver universally reliable (and broadly affordable) high-speed Internet service.
You can read Taglang’s entire analysis here in which he explores the various other ways SB 3683 violates both the spirit and letter of the IIJA.
New York’s municipal broadband-killing Trojan horse?
In the Empire State, legislation is making its way through the New York state legislature that, while not openly violating Congressional intent the way the legislation introduced in Illinois does, it does potentially limit the viability of municipal broadband projects.
In the state Senate’s Transportation, Economic Development, and Environmental Control portion of the budget (S. 8008 B), subsection 140, paragraph (e), it directs the New NY Broadband Grant Program referred to as ConnectALL to “identify and engage any and all private partners to undertake and manage the proposal, or demonstrate to the division’s satisfaction that a private or private-public partnership model is not viable, practical or suitable to meet the needs of the consumers covered by the proposal.”
Then in subsection 141, paragraph 7(a), it stipulates that “in awarding the grants, the division shall give preference to: (a) proposals that have a business plan based on a public-private partnership model or provide a mechanism for transition of services to a private entity in the future.”
We are not lawyers, but we have spoken to community broadband advocates in New York who see these bits of legalese as a Trojan horse that would make it difficult to fund municipal broadband proposals with these unnecessary obstacles in place.
Now, in fairness to the New York state senators working on this, there is language in the bill that explicitly states that the ConnectALL program is authorized to use broadband grant funds “to solicit and receive proposals from municipalities, state and local authorities,” and other public entities for “open-access deployment and/or increasing adoption of broadband services, and to issue grants for planning and implementation of such proposals.”
So it may be that harried lawmakers and their staff do not understand the implications of those particular provisions. However, considering the outsized influence that Charter and Verizon has historically held over state lawmakers in New York, the subsections referred to above should be considered a red flag.
In our view, it is better to err on the side of clarity, and conform with both the letter and spirit of NTIA’s rules. If Charter or Verizon afterwards want to spend the wealth they’ve extracted from communities suing the state for supporting a municipal broadband project designed to solve local connectivity problems, they are welcome to do so.
It’s also worth noting the flawed premise of the bill’s language in those subsections, which is that privately-owned networks are the same as publicly-owned networks. That’s demonstrably false.
Take Chattanooga’s municipal utility EPB Fiber, for example. Because they successfully built a citywide fiber network that has kept those investment dollars in Chattanooga, the city was able to establish HCS EdConnect, which is a program that provides a decade worth of 300 Mbps symmetrical fiber-to-the-home connectivity to over 15,000 low-income students (8,500 households) in the city’s school district for free. This is in addition to the $2.7 billion return on investment already identified by an academic study. Chattanooga’s EPB Fiber uses the same gear and vendors that many of the big monopolies do.
The reason for the difference in outcome is simple: large monopoly and local publicly-owned Internet Service Providers have different incentives. The monopoly providers are looking to extract wealth from communities. Publicly-owned networks are more like roads or water and sewer systems with no demand that the enterprise turn a profit. In the community broadband approach, broadband is seen as a utility with far-reaching economic and social multiplier effects, not a mere consumer product to be sold for the benefit of company shareholders.
Keep an eye on state legislatures
If Democrats are pushing these bills in Illinois and New York, we’ll be surprised if no other states suddenly emerge with language to slow investment in new networks designed to meet low-income family needs or solve other pressing challenges in areas where the big monopoly providers prefer to continue being the only game in town.
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 appearing at MuniNetworks.org on March 24, 2022, the piece is republished with permission.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
Digital Inclusion
Emma Gautier: Addressing Digital Discrimination Will Take More Than Policing ISPs
It is crucial to prioritize community solutions where service is offered in partnership with trusted community institutions.

This is a walk and chew gum moment for broadband-for-all advocates. On the one hand, the Federal Communication Commission new digital discrimination rules have the potential to reign in egregious examples of digital discrimination. On the other hand, the new rules still fall short of putting forward the kinds of structural solutions necessary to address underinvestment in communities where federal infrastructure dollars may never reach.
Last week, the FCC published its final digital discrimination rules, giving the agency the authority to penalize Internet Service Providers whose policies have a “disparate impact” on historically marginalized communities. The Infrastructure Investment and Jobs Act, passed by President Biden in 2021, included a mandate directing the FCC to develop “rules to facilitate equal access to broadband internet access service, taking into account the issues of technical and economic feasibility presented by that objective, including—preventing digital discrimination of access based on income level, race, ethnicity, color, religion, or national origin.”

After hosting listening sessions and inviting public comment, the final ruling ultimately defined digital discrimination as “policies or practices, not justified by genuine issues of technical or economic feasibility, that (1) differentially impact consumers’ access to broadband internet access service […], or (2) are intended to have such differential impact.” Such an approach authorizes the FCC to penalize providers even if it can’t identify instances of intentional discrimination.
Initial Responses to the Ruling
As expected, the big monopoly incumbents all but exploded over the FCC’s decision to measure discrimination based on disparate impact, arguing that the new rules go beyond what the IIJA intended when it granted the agency authority to prevent digital discrimination and facilitate digital equity. A secondary argument they make is that the disparate impact approach micromanages business and will discourage providers from investing in certain areas for fear that they will be penalized for profit-seeking behavior.
Meanwhile, public interest groups and members of Congress have lauded the ruling for its focus on disparate impact, a standard advanced by the disability community. In comments filed with the FCC, the American Association of People with Disabilities emphasized how people who are discriminated against experience the effects of discrimination whether or not it was the result of conscious bias:
- “For decades, the disability community has noted that discrimination occurs unintentionally and often results from seemingly neutral policies. Too often, disabled people experience discrimination not because of malicious intent or explicit exclusion within programs or policies but because the disabled people were simply not considered in the first place.”
How Much Practical Impact Will The Rules Have?
Despite industry pushback, it shouldn’t be lost on anyone that the rules have limitations that raise questions about the practical effect they will have. It is unclear, for example, what exactly the FCC will allow on the basis of “economic feasibility.” The rules don’t outline how the Commission will distinguish between “economic feasibility” versus profit-maximization or whether such a distinction will be used to adjudicate rulings. All we know is that the Commission will evaluate each instance of alleged discrimination on a case-by-case basis, relying on precedent set by other ISPs to determine what is technically and economically feasible and what is not.
A detail that has been largely overlooked is that to find an ISP responsible for digital discrimination, the rules say, disparate impact must be traced back to a “specific policy or practice that is causing the disparity.” Policies and practices adopted prior to when the rule became active are not subject to repercussion.

Another reason to question the rules potential impact is that historically the FCC doesn’t have a strong track record holding big cable and telecom companies accountable. While large providers have been found to neglect infrastructure upgrades and charge higher prices for lower speeds in low-income neighborhoods, it would be uncharacteristic of the agency to crack down on these massive companies. There is very little information from the FCC about what enforcement will really look like; the ruling only notes that “possible violations will be investigated by Commission staff using our standard investigative toolkit, and all penalties and remedies will be available when we determine that our rules have been violated.”
Concerns have also been raised around the transparency of the complaint process the FCC will use to help it identify discrimination. As The Markup points out, “complaints [filed by the public] won’t necessarily begin a formal adjudication process against the ISP, but they can be used as a basis for the FCC to begin its own investigation into the provider’s conduct.” There are no transparency mechanisms laid out in the ruling, which will no doubt make it easier for the FCC to sweep complaints under the rug.
Another wildcard that could come into play is how the U.S. Supreme Court rules on a case now before it that, while focused on the SEC, has implications for federal agencies ability to enforce administrative judgements.
A Surface-Level Response to a Deeply Structural Issue
As other public interest groups argue, it is more important to advocate for the needs of communities than it is to try and untangle the intentions of ISPs. And truly centering communities begins with an honest recognition that digital discrimination is deeply structural – something the FCC and federal lawmakers have been reluctant to acknowledge.

It’s a challenge that merits a ground-up solution that goes beyond giving the FCC theoretical authority to penalize providers. Instead, it would be more productive to focus on facilitating community investment that will meet the varying needs of households that aren’t yet connected.
The ruling implicitly assumes the Broadband Equity Access and Deployment Program (BEAD) will lead to investment in areas traditional providers have not found economically attractive, and that together, the digital discrimination ruling and BEAD work to make Internet access available for all.
Unfortunately, many of the communities that have been impacted by digital discrimination are urban areas that are unlikely to see BEAD dollars, as the infrastructure law was designed to funnel funds to mostly rural communities. Add to that the flawed FCC maps, which vastly overstate coverage, speeds, and competition, and it will be extremely difficult if not impossible for BEAD funding to reach most urban areas deemed “served” by monopoly providers.
The reality is that it can be profitable to discriminate, as the big monopoly ISPs are set up to first and foremost serve their shareholders, not the communities from which they derive their profits.
These companies are structured to offer service in areas where they will see a quick return on investment, which often means the parts of town that most need to be connected are left unserved or grossly underserved.
Imposing penalties on discriminatory ISPs could potentially scare some into upgrading parts of networks or eliminate glaring price disparities in historically marginalized neighborhoods. But without actual policies in place that encourage competition and universal access to high-quality Internet, the impact of the new digital discrimination rules will likely be limited.
It should also be noted that monopoly ISPs wield tremendous power over markets in a multitude of ways, not the least of which is their well-documented assault on competition. These companies fight tooth and nail to block new ISPs from entering the market, leveraging their considerable influence to convince lawmakers that there is no urban broadband problem that merits public funding. This has worked to persuade Congress that new infrastructure funding should target rural communities and leave the larger urban markets to the big incumbents, even if the service they offer is expensive and of poor quality. Their influence can also be seen in the federal government’s failure to take competition into account, which is indisputably linked to the quality of broadband service and price offered in a particular area.
Real Solutions Will Be Community-Rooted
After such major outcry among major ISPs responding to the digital discrimination ruling and its “disparate impact” approach, it’s difficult to imagine these companies bringing quality, affordable broadband service – as well as digital equity support – to communities that need it. It’s not just cynicism to point that out, as these very same companies argue that the ruling will “chill” investment, which doesn’t exactly instill confidence that they intend to invest in communities most in need of service.

There are approaches, however, that do aim to connect the unconnected in ways that are not squarely focused on a quick return on investment. Municipal broadband, partnerships with small community-minded ISPs and other forms of publicly-owned, locally-controlled networks have demonstrated a way to provide universal, affordable service across an entire community, as well as the programs to address other barriers to broadband adoption such as providing devices and digital skills training.
In a letter to the FCC regarding the digital discrimination proposed rulemaking, a group of digital equity initiatives and public interest organizations including ILSR elevated an approach to closing the digital divide that focuses on “building trusted relationships, allowing communities to own infrastructure, build capacity, and experiment with solutions, and allowing for community-driven decision-making and knowledge-building.”
It is crucial to prioritize community solutions where service is offered by trusted entities or providers operating in partnership with trusted community institutions. The public comment goes on to emphasize that “challenging digital discrimination cannot be solely concerned with giving more Black, Brown, tribal, and people in rural areas broadband run by large corporations just to increase their upload and download speeds. In fact, this approach simply exposes our people to more data surveillance and dependency.”
Continuing to Push for Community Control

Biden’s original broadband vision did call for “support for broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives—providers with less pressure to turn profits and with a commitment to serving entire communities.”
The Biden administration also intended to promote “competition among internet providers, including by lifting barriers that prevent municipally-owned or affiliated providers and rural electric co-ops from competing on an even playing field with private providers.”
Such an approach recognized that where community broadband providers have been established, subscribers get fast, reliable service at competitive rates. While this approach offered some hope that Biden’s broadband plan would invest in boosting competition among providers, the plan was substantially watered down before it passed in Congress.

As a result, few municipal broadband projects outside of rural America are likely to receive funding under BEAD, IIJA’s largest bucket of broadband infrastructure money. The failure of Congress to prioritize community broadband is evidence of the political tradeoff made by Democrats to get the law passed. And while it’s better to penalize providers for egregious discrimination than to continue allowing them to exploit communities in an unfettered pursuit of quick profits, it’s important to keep pushing for more structural solutions.
Now that federal law and policy-makers have set the parameters, it seems wise to direct our attention towards the local level.
The digital discrimination ruling could, for example, give cities leverage in combating digital discrimination at the local level, or at least provide an opportunity to offer up better data that illustrates where and in what contexts discrimination is occurring.
We hope to see cities, public interest groups, and broadband-for-all advocates use the new FCC rules to highlight why certain communities face chronic underinvestment while making the case that community-minded ISPs and non-traditional providers can offer high-quality, affordable broadband to the communities who most need it.
Emma Gautier is a Researcher with ILSR’s Community Broadband Networks Initiative. She supports data collection and analysis within the broadband initiative. Emma recently received a BA in Women’s and Gender Studies from Carleton College, and since graduation has been working in research, advocacy, and political organizing for social and environmental justice. She is interested in the synthesis of research and on-the-ground action in communities. This piece was originally published on communitynets.org on November 30, 2023, and is reprinted with permission.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
Cloud
John English: Isolating Last-Mile Service Disruptions in Evolved Cable Networks
The adoption of new technologies presents operators with a plethora of new variables to manage on the user control plane.

Cable operators are increasingly investing in next-generation network infrastructure, including upgrades to support distributed access architecture and fiber to the home.
By bringing this infrastructure closer to subscribers, cable operators are evolving their networks, adopting greater virtualization and redistributing key elements toward the edges. They expect these changes to increase their network’s interoperability and, ultimately, improve the speed and uptime available to subscribers. In turn, cable operators expect these new capabilities will help redefine what services they can offer.
However, these new advanced networks are much more complex than previous generations. By virtualizing or cloudifying functions at the edge, operators risk losing the sort of visibility that is essential to rapidly pinpointing the source of service disruptions – and ensuring their networks are meeting desired performance thresholds for next-gen applications.
The challenge of complexity in virtualized networks
As cable networks evolve, so does their complexity. The adoption of technologies like virtualized Cable Modem Termination Systems (vCMTS) and distributed access architecture presents operators with a plethora of new variables to manage, particularly on the user control plane.
Always-on applications and those applications that are most sensitive to network performance changes, such as video games, AR/VR, and remotely-piloted drones, to name just a few examples, require continuous measurement and monitoring for reliability. But ensuring consistent quality of service under all conditions the network may face is no small feat.
To illustrate, let’s consider how cable operators will manage disruptions in a virtualized environment. When issues inevitably pop up, will they be able to isolate the problem virtually, or will they need to dispatch a technician to investigate? Additionally, once a technician is onsite, will they have advanced intelligence to determine if the source of the problem is hardware or software-related?
Or will they need to update or replace multiple systems (e.g., consumer premesis equipment, optical network terminals, router, modem, etc.) to try to resolve the problem? Finally, will they need to also investigate additional network termination points if that doesn’t do the trick?
Indeed, each time a truck or technician is dispatched represents a significant outpouring of resources, and adopting a trial-and-error, process-of-elimination approach to resolution is a costly means of restoring service that cable operators cannot afford at scale. Likewise, the customers that depend the most on constant network availability and performance for various uses, such as content distribution networks, transportation services, and industrial manufacturers, won’t tolerate significant disruptions for long.
Packet monitoring for rapid resolution of last-mile disruptions
In the evolving landscape of cable networks, where downtime can lead to customer dissatisfaction, churn, and revenue loss, rapid resolution of last-mile service disruptions is paramount. Cable operators need more advanced network telemetry to understand where – and why – disruptions are occurring. In short, evolved networks require evolved monitoring. This starts with deep packet inspection at scale.
Packets don’t lie, so they offer an excellent barometer into the health of both the control and user planes. Additionally, they can help determine last-mile & core latency per subscriber, as well as by dimension, so operators can test how different configurations affect performance.
Additionally, in the event of a major service disruption, packet monitoring at the edge enables operators to accurately measure how many subscribers are out of service – regardless of whatever hardware or software they’re using – and determine if there’s a common reason for mass outages to help technicians resolve any problems faster. Finally, proactive monitoring, especially when combined with artificial intelligence, empowers operators to detect and address potential issues before they impact subscribers.≠
All in all, cable operators are navigating a challenging yet exciting era of network evolution. The transition to advanced infrastructure and the demand for high-quality, low-latency services necessitate sophisticated monitoring and diagnostic tools. Deep packet inspection technology will continue to play a pivotal role in ensuring the smooth operation of evolved cable networks.
Additionally, in the quest to maintain the quality of service expected by subscribers, operators must abandon the costly process-of-elimination approach and adopt rapid resolution techniques. By doing so, they will not only reduce service disruption but also make more efficient use of resources, ultimately benefiting both their bottom line and the end user’s experience. Evolved cable networks require evolved strategies, and rapid issue isolation through advanced monitoring must be at the forefront of this transformation.
John English is Director of Service Provider Marketing and Business Development at Netscout’s Service Provider unit. He has an extensive background in telecom, including a decade at a major communications service provider and numerous OEMs and ecosystem partners. English is an expert on how communications service providers can successfully implement new technologies like 5G and virtualization/cloudification while continually assuring the performance of their networks and services. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
Expert Opinion
Ted Hearn: Is a Ban on Cable and Satellite ‘Junk Fees’ Rate Regulation?
The Federal Communications Commission says no.

The Federal Communications Commission could have a legal problem on its hands, but agency lawyers seem to have crafted what appears to be an acceptable workaround: Don’t call a ban on certain cable and satellite TV billing fees rate regulation – call it consumer protection.
At its Dec. 13 open meeting, FCC Chair Jessica Rosenworcel is planning to launch a rulemaking designed to bar cable and satellite TV providers from collecting early termination fees and billing cycle fees – even though the agency receives just hundreds of informal complaints about these fees annually. The U.S. has 53.3 million cable and satellite TV subscribers combined, down 15.7 million since January 2021.
Although the FCC says a ban on these fees has nothing to do with rate regulation, the agency is likely to face strong rebuttal on this point – if not from NCTAitv, the trade association for large cable TV operators, then at least from Charter Communications. Charter invoked impermissible rate regulation in its court fight against a billing cycle fee ban adopted by the state of Maine in 2020 that remains in effect.
In seeking U.S. Supreme Court review of its loss below, Charter was emphatic that Maine’s billing cycle fee statute embraced prohibited price regulation by requiring partial-month refunds.
“Maine’s law … caps Charter’s rates during the final month of service and precludes Charter from charging either for the full month, or a daily rate higher than its standard monthly rate. That is rate regulation, pure and simple,” Charter said last year in a brief with the high court. The Supreme Court declined to take the case, handing victory to Maine.
An early termination fee is collected when a customer cancels service prior to the expiration of an existing service contract, which can run as long as 24 months. A billing cycle fee involves denial of pro rata refunds when customers cancel before the end of the month. Echoing President Biden, Rosenworcel blasted ETFs and BCFs as “junk fees” that penalize consumers and impede competition.
If all goes according to plan, the FCC will adopt new junk fees rules in 2024. The FCC has floated an exemption for small or rural cable TV operators, but it put the onus on these entities to justify any special treatment.
The FCC’s crackdown on ETFs and BCFs would run counter to the agency’s bipartisan light-touch approach to cable TV regulation that began more than two decades ago. By law, the FCC in 1999 had to cease regulating the price of cable’s expanded basic tier, a service level which typically includes ESPN, C-SPAN, CNBC, and Fox News.
In 2015, the FCC stripped away the last layer of cable rate regulation. The agency, led at that time by Chairman Tom Wheeler, an Obama appointee, held that every cable operator in the country was subject to “effective competition.” That prevented local governments from continuing to regulate cable’s basic tier – the traditional home of local TV stations and public access channels. Rosenworcel, then an FCC Commissioner, voted against the Wheeler plan as going too far.
Rosenworcel is evidently not planning on letting the agency’s long legacy of cable deregulation to prevent her from pivoting in the opposite direction.
Sprinkled throughout the FCC’s junk fees ban proposal are references to recent court cases holding that BCFs are not rate regulation preempted by federal law, but rather consumer protection measures that states are permitted to adopt and enforce. The FCC said the logic used by the courts in upholding state BCFs applies just as well to a would-be ETF ban.
The FCC said its authority to ban ETFs and BCFs on cable is contained in the 1992 Cable Act, saying it provides for the agency to protect “consumers against … poor customer service” and “establish standards by which cable operators may fulfill their customer service requirements.”
Whether past FCC cable deregulation steps would prevent a junk fees ban, the FCC concluded: “The applicability of ETF and BCF regulations are not affected by the existence of effective competition in a community.”
DBS providers Dish and DirecTV will probably have an easier time than cable in getting a junk fees ban struck down in court.
Since their arrival in the mid-1990s, Dish and DirectTV have never been price regulated at the state or federal level or subject to any form of cable-like specific customer service obligations adopted by the FCC.
Still, the FCC is confident regarding its power to act, asserting that it retains “exclusive jurisdiction to regulate the provision of direct-to-home satellite services” and authority to impose “public interest or other requirements for providing video programming” on DBS.
In a final rationale left undeveloped, the FCC said a junk fees ban exemption for Dish and DirecTV would be inappropriate because it would allow the DBS providers to gain “a competitive advantage over their competitors through the use of ETFs and BCFs.”
The FCC failed to explain how DBS reliance on junk fees deemed unlawful for cable could be an effective tool at keeping customers or attracting new ones while Dish and DirecTV bled nearly 700,000 subscribers in the most recent quarter.
Maybe FCC lawyers don’t have it all figured out after all.
Ted Hearn is the Editor of Policyband, a new website dedicated to comprehensive coverage of the broadband communications market. A former communications executive and reporter for newsletters and trade journals, Hearn has decades of experience with traditional video and broadband industry trends, regulatory developments, technology advancements, and market dynamics. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
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