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BEAD Letter of Credit Concerns, $4.3M in ACP Outreach Grants, FCC Waives Rules for Hawaii Wildfires

The letter follows calls to drop the credit rule that it said could shut out smaller ISPs from funding.

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Photo of FCC Chair Jessica Rosenworcel in 2015 by New America

August 21, 2023 – More than 50 internet providers, industry associations and digital equity advocates have jointly signed a letter urging alternatives to the letter of credit requirement for the Broadband Equity, Access, and Deployment program.

Addressed to the National Telecommunications and Information Administration and Department of Commerce, the letter claims the requirement that grant recipients provide a letter of credit for 25 percent of the grant amount, coupled with a 25 per cent match in funding, will effectively “shut out a huge number of ISPs.”

This provision will prevent small and community-centered ISPs, nonprofits and municipalities from participating in federal funding opportunities as it requires them to have “vast sums of capital” locked away for the full duration of the build, read the letter.

For example, “a provider seeking a $7.5 million grant for a $10 million project will need at least $4.6 million of their own capital up-front,” it explained.

Instead, the letter proposed alternative mechanisms such as performance bonds or delayed reimbursements to “ensure proposals are viable and that applicants have the capacity to perform.”

Since its circulation last week, the letter has garnered over 50 signatures, with supporters including the American Association for Public Broadband and the digital equity fund Connect Humanity.

This represents the most recent endeavor within the telecommunications industry to push for changes to the letter of credit requirement, building upon previous concerns expressed in July.

FCC announces more ACP grants

The Federal Communications Commission announced Thursday $4.3 million in outreach grants to boost participation in the Affordable Connectivity Program, which offers subsidies for internet services and devices for low-income households.

Distributed under the ACP Outreach Grant Program, the funding opportunity is set to benefit 12 states and territories that were not included in the initial round of funding. These areas include American Samoa, Commonwealth of the Northern Mariana Islands, Delaware, Guam, Idaho, Iowa, New Hampshire, Rhode Island, South Carolina, South Dakota, West Virginia, and Wyoming.

To date, the FCC has reported a commitment of over $72 million through 228 ACP outreach grants, helping more than 20 million, out of the 48.6 million eligible households, to receive benefits from the program.

However, mounting concerns regarding the long-term sustainability of ACP funding, which is projected by some to be depleted in early 2024, have been steadily accumulating. Calls to replenish the funding have come from a wide range of voices within the industry and beyond. So far, these calls have remained unanswered by Congress.

FCC waives broadband rules for Hawaii wildfires

The FCC on Friday waived multiple obligations under the Universal Service Fund and other broadband programs to assist households and providers affected by the Hawaii wildfires.

In consideration of the “catastrophic damage and destruction” and following President Joe Biden’s declaration of a state of emergency, the FCC will temporarily suspend certain rules under the Lifeline, Affordable Connectivity Program, E-Rate, Emergency Connectivity Fund Program, Rural Health Care Program, and High Cost program.

In particular, program subscribers and providers located in the affected disaster areas will be exempted from specific filing and regulatory deadlines as outlined in the agency’s notice.

The announcement comes as part of FCC Chairwoman Jessica Rosenworcel‘s recent pledge to aid in Hawaii wildfire recovery. Her commitment involves mobilizing both FCC personnel and service providers to assist the affected areas in restoring wireless services.

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Nvidia Navigates Export Rules, FCC on High-Cost, Kansas Awards Fiber Grants

Department of Commerce continues to combat the export of U.S. semiconductors to adversarial nations

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Photo of U.S. Department of Commerce Secretary Gina Raimondo

December 4, 2023 – Commerce Secretary Gina Raimondo said Saturday that the department is ready and willing to impose further export restrictions on any products made by graphics card maker NVIDIA that assists adversarial nations in developing their artificial intelligence capabilities, according to a story from Fortune

“If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day,” Raimondo said at the Reagan National Defense Forum in Simi Valley, California, according to Fortune. 

Nvidia, which has been focusing on its development as an AI company, has restructured its advanced chips to access the Chinese market, which is worth at least $400 million in sales. In response to exports restrictions imposed by Commerce in August 2022, Nvidia tweaked its A100 chip series to comply with U.S. rules, limiting the processing capabilities and re-releasing the chips under a new name, the A800 series.

In October 2023, Commerce imposed additional licensing requirements based on performance threshold to limit the export of high-performance computing chips, to include the A800 series. Less than a month later, Nvidia had introduced a series of GPUs with limited computing capabilities in compliance with Commerce export requirements, made available to Chinese customers.

Commerce has said it is trying to limit risks of the chips being used in foreign military operations.

In response to Secretary Raimondo’s recent claims, Nvidia told Broadband Breakfast, “We are engaged with the U.S. government and, following the government’s clear guidelines, are working to offer compliant data center solutions to customers worldwide.”

The advanced chips are central components to the rise of artificial intelligence, autonomous machines, cloud and high-performance computing.

FCC issues guidance to high-cost support recipients 

The Federal Communications Commission released guidance Wednesday for recipients of high-cost support, outlining the coordination necessary between the recipients, state broadband offices and Tribal entities to avoid overbuilding in areas supported by multiple broadband programs. 

The FCC notes that the recipients of the high-cost programs, which include the Rural Digital Opportunity Fund, Enhanced Alternative Connect America Cost Model, and Connect America Fund, must participate in the broadband map challenge process as states prepare to deliver money from the $42.5-billion Broadband Equity, Access, and Deployment program.

“Full participation of high-cost support recipients in BEAD Program challenge processes is critical to ensuring that the FCC’s high-cost funding is not duplicated by the BEAD Program,” the FCC said in the guidance. 

“Participation in the BEAD Program challenge process also ensures state broadband offices receive information about high-cost program supported deployments beyond the valuable information provided on the Broadband Funding Map,” it added. 

These recipients should coordinate with their respective state broadband office by taking steps to ensure that the National Broadband Map accurately reflects the locations they serve, the speeds they provide to the locations, and the technologies they are using to serve those locations, the FCC emphasized. 

In addition, the FCC guidance emphasizes that high-cost support recipients should engage with each relevant Tribal government annually to obtain the necessary consent, permits, and other approvals as soon as practicable, even if the recipient has not begun deployment. 

The Tribal engagement obligation set by the FCC represents an opportunity for Tribal governments and high-cost support recipients to coordinate on many issues critical to the deployment and adoption of communications technologies on Tribal lands.

Kansas awards $28.5 million in state broadband grants

Kansas announced it is awarding $28.5 million in broadband grants Wednesday to twelve internet service providers through the state’s Lasting Infrastructure and Network Connectivity program. All of the funding dedicated to broadband infrastructure is going toward deploying fiber technology.

One of the largest awards is to the Prairie Band Potawatomi Nation, a native American tribe, which will bring fiber-to-the-home connectivity to all of the nation’s 204 residences, as well as to 10 Tribal government services locations on the PBPN reservation. 

Additionally, included in the awards is funding for Kansas’ first carrier-neutral Internet Exchange Point, which will be located on the campus of Wichita State University. The IXP stands to reduce IP transit pricing to below 10 cents per megabit, an expected 90% reduction in cost as compared to current transport and transit pricing through Kansas City, Missouri. 

The awards will also expand middle mile infrastructure through two economically distressed counties in north central Kansas. 

The state funds will be matched by the ISPs for a total of $33.9 million in additional investments.

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Broadband Roundup

Supply Chain Improvements, Bill for Broadband in Public Parks, FCC Grants Alert System Compliance Extension

The Biden administration announced Wednesday a list of new measures to promote supply chain resiliency.

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Photo of Congressman Raúl Grijalva, taken by Gage Skidmore 2018. 

November 30, 2023 – President Joe Biden announced at an inaugural meeting Wednesday new measures to improve national supply chain resilience, many of which are targeted at bettering semiconductor manufacturing. 

These new measures will see the development of a geospatial mapping protocol that will be used to account for and track trade disruptions of raw materials, with a special focus on ones that are involved in semiconductor manufacturing.

Additionally, the US plans to develop a resilience center to assess risks and supply chain vulnerabilities specifically inside national ports alongside looking at how to better implement CHIPS and Science funding.

In July of 2022, the Biden administration signed into law the CHIPS and Science Act, which was broadly supported by lawmakers, putting $52 billion into semiconductor research and development and a 25 percent investment tax credit to promote manufacturing. 

More recently, Biden has announced tech innovation hubs supported by CHIPS Act funds, four of which will focus directly on improving semiconductor production and manufacturing. 

Legislation put forth to expand broadband to public parks 

Congressman Bruce Westerman, R-Arkansas, and Congressman Raúl Grijalva, D-Arizona, introduced legislation Wednesday that would bring broadband connectivity to public parks and lakes. 

The Expanding Public Lands Outdoor Recreation Experiences Act would include increasing broadband connectivity in those visitor centers and surrounding areas as well as create digital passes for visitors to use when going to those parks. 

“The increasing popularity of outdoor recreation is a boon for local economies and job creation, but we must make sure our public land management agencies have the tools, resources, and staff they need to keep up,” said Grijalva. 

The broader legislation looks to improve access to public lands and waters, modernize visitor experiences and reduce overcrowding. 

FCC granted emergency alert development extensions to broadcasters

The Federal Communications Commission granted extensions to certain national broadcasters Wednesday, allowing them more time to acquire equipment needed to comply with national emergency alert system requirements. 

There are two ways that broadcasters can transmit emergency messages, either to devices connected to the internet using what is called the Integrated Public Alert and Warning System or over audio channels, which is referred to as the legacy emergency alert broadcast system. 

Historically, messages sent via IPAWS transmit more information to the recipient than ones that are formatted for being transmitted via the legacy system. Because of that, in 2022 the FCC required emergency broadcasters to alert constituents via the IPAWS unless they were unable to. 

Broadcasters were required to comply with this by December 12 of this year. However the National Association of Broadcasters and REC Networks, a broadcast advocacy group, filed a joint request for a 90-day compliance extension.

They explained that Sage Alerting Systems, a manufacturer of firmware needed to encode and decode emergency messages, is not able to meet supply demands for broadcasters to update equipment by the December 12 deadline. 

As a result, the FCC waived the deadline and granted a 90-day extension to emergency broadcast participants who are customers of Sage Alerting Systems. 

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FCC Fines TracFone, Rip and Replace Extensions, Kansas State Internet Exchange Point

The FCC’s Enforcement Bureau has entered into a settlement with TracFone for subsidy program violations.

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Photo of Kansas Gov. Laura Kelly taken by K-State Research and Extension, 2023.

November 29, 2023 – The Federal Communications Commission announced Wednesday that the Enforcement Bureau and TracFone Wireless, a Verizon Subsidiary, have reached a $23.5 million settlement for TracFone’s violation of broadband subsidy program rules

After TracFone was acquired by Verizon, the company self-reported instances in which it violated the FCC’s regulatory rules for the Lifeline and Emergency Broadband Benefit programs, according to the agency  

During an investigation into TracFone, the agency found that the company reported improperly claiming support for customers jointly-enrolled in subsidy programs and improperly using inbound text messages to make claims for customers who had not been using those services for at least 30 days, according to a press release.

According to the FCC, TracFone also conceded that some of their field enrollment representatives used false tax documents to enroll customers in the lifeline and EEB programs.

“Whether attributable to fraud or lax internal controls, or both, we will vigorously pursue allegations of misconduct that harms critical FCC programs designed to help those most in need of communications-related services,” said Enforcement Bureau Chief Loyaan A. Egal.

As part of the settlement, TracFone has entered into an improvement plan agreement with the Enforcement Bureau.

Wireline Bureau grants more rip and replace extensions 

The FCC’s Wireline Competition Bureau announced in an order Wednesday that it has granted rip and replace extensions to Montana providers Triangle Telephone Cooperative Association Inc. and Triangle Communication System Inc.

The rip and replace program requires service providers to remove and replace any equipment they use that was manufactured by Huawei Technologies Company or ZTE Corporation that were installed prior to June 30, 2020, because of security concerns. 

Triangle Telephone filed for an extension on October 18 and on November 10th, requesting an extension to replace the equipment by Map 29, 2024 as opposed to their original deadline of November 29 of this year.

Triangle Communications filed their request for extension on October 18 and November 16 of this year requesting for additional time up until July 13, 2024, as opposed to January 13, 2024. 

Both petitioners cited supply chain disruptions and delayed equipment delivery as factors preventing them from replacing existing equipment alongside poor weather conditions and a decreasing number of employees. 

Both providers were granted the extensions they had requested. 

Additional funding from Congress has been requested by president Joe Biden to finance the rip and replace program, as a report published by the Federal Communications Commission in July of 2022 noted that the program’s initial $1.9 billion would not be enough to support providers. 

In October of this year the FCC’s Wireline Bureau issued extensions to two other providers who cited that they were unable to completely replace the equipment due to lack of funding. 

Kansas awards $5 million to internet exchange point 

Kansas Gov. Laura Kelly on Wednesday announced that the state had awarded $5 million to help fund the construction of the first carrier-neutral internet exchange point at Wichita State University.

The construction of this carrier-neutral internet exchange point will allow for the operation of cloud services and streaming content networks to operate more efficiently alongside local and regional internet networks, explained a press release. 

The endeavor will be undertaken by Connected Nation, a Kentucky non-profit, and Hunter Newby, founder of Newby Ventures investment firm, working with them to build and operate the internet exchange facility. 

Tom Ferree, CEO of Connected Nation, said that the exchange point will support Wichita State and the economy well “by improving the entire regional broadband landscape — preparing Wichita, and Kansas more broadly, for the future evolution of the Internet and all that it will enable.”

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