What Comes Next in the IP Transition: More Public Input

On January 30, the Federal Communications Commission launched a broad set of voluntary experiments meant to ensure that the nation’s communications networks continue to provide the services consumers want and need in this era of historic technological transformations. And the FCC also initiated two new proceedings to collect more input from the public about what many call the IP Transition.

I. Numbering Research [WC Docket 13-97]

In a previous post, we explored how, in the all-IP network, telephone numbers will be one set of addressing identifiers among many, which include domain names, IP addresses, and service specific identifiers. The IP Transition raises challenges and opportunities for the assignment of telephone numbers within the North American numbering plan and for the features, capabilities, and security of numbering-related databases.

The FCC is proposing funding telephone numbering research to support initiatives for a telephony numbering testbed for collaborative, multi-stakeholder research and exploration of technical options and opportunities for telephone numbering in an all-IP network. The FCC is seeking public input on the appropriate budget and funding. The FCC requires the collection of numbering contributions associated with telephone numbering management that are used to fund the operation of numbering databases and services.

  • Should the FCC use some of the revenue collected from these contributions to fund the testbed and related research?
  • How would funding for such research be determined?
  • What types of awards would be appropriate?
  • Should the FCC seek North American Numbering Council (NANC) input on what research needs to be conducted? If so, what timeframe would be appropriate for obtaining input from the NANC?
  • Should the FCC solicit other numbering-related research proposals? If so, what kind of research would be most helpful and how should the
  • FCC facilitate such research?

II. Rural Broadband Experiments [WC Docket No. 10-90]

The FCC is seeking proposals to build robust last-mile broadband to offer service to a wide range of end users in rural communities and, specifically, in rural areas lacking Internet access service that delivers 3 Mbps downstream/768 kbps upstream. Funding for these experiments will be made available from the FCC’s Connect America Fund. But the FCC is still seeking public comment on how best to proceed with these rural experiments.

A. Budget

The FCC intends to provide funding for experiments to extend broadband networks in rural, high-cost areas without increasing the overall size of the Universal Service Fund. In 2011, the FCC directed the Universal Service Administrative Company (USAC) to collect $4.5 billion annually for the Connect America Fund, and, to the extent disbursements in a given year are less than collections, deposit the excess in a broadband reserve account. Because annual disbursements have been less than $4.5 billion to date, and funds have accumulated in the reserve account, a limited amount of funding could be awarded for experiments in 2014 from the reserve account without exceeding the overall $4.5 billion annual budget for the Connect America Fund. According to USAC, the Connect America reserve account is projected to have an ending balance of $230 million in unallocated funds.

The FCC is proposing that a limited amount -- not all -- of these unallocated funds be made available for experiments in any part of the country. The FCC seeks public input on the following questions:

  • Should the FCC make available $50 or $100 million or some other amount in total support for experiments? (For instance, if the Commission were to allocate $100 million in funding for trials, that could be provided as $100 million in one-time support, or $10 million in support over ten years, or $20 million in support over five years, or some combination thereof.)
  • Should the FCC allocate a lesser or greater amount?
  • Should the FCC specifically allocate a separate amount for non-recurring support to be awarded on a competitive basis, in addition to recurring support, or merely a total amount that can used in a variety of ways, depending on the applications received?

B. Experiments in Areas Where the Incumbent is a Rate-of-Return Carrier

The FCC will entertain proposals to extend next generation networks in areas where the incumbent provider is a rate-of-return carrier.(1) The FCC intends to use the experiments as a vehicle to consider how the Commission might develop a longer term Connect America mechanism that would be appropriately designed to ensure that consumers, businesses, and anchor institutions in rate-of-return areas have access to innovative services delivered over high-capacity networks. The intention of the experiments is NOT to threaten the financial viability of broadband networks that exist today through support from the FCC’s existing high-cost mechanisms. The FCC will entertain proposals at the census block level instead of census tract level in recognition that smaller providers may wish to develop proposals for smaller geographic areas.

The FCC proposes to use a two-stage application process for applications from entities wishing to participate in experiments to extend next generation networks in areas where the incumbent is a rate-of-return carrier. NTCA, http://www.ntca.org/ a lobbying association representing small and rural telephone cooperatives and commercial companies, suggests that the FCC should provide incumbent rate-of-return carriers an initial window to submit applications for the experiment, in advance of soliciting applications from other parties, and also should allow the rate-of-return carrier to undertake the same deployment proposed by a non-incumbent for the same or a lesser amount of support.

The FCC seeks comment on these proposals and on these specific questions:

  • If the FCC were to adopt such a framework, how much time should be provided for the incumbent to indicate that it is willing to deploy broadband to the same geographic area for the same or a lesser amount of support as proposed by a non-incumbent applicant?
  • Should the FCC provide an opportunity, in turn, for the original applicant (the non-incumbent) to modify its proposal?
  • Would the additional time and complexity of implementing such a process to make final and best offers be unwieldy in what is intended to be a short-term experiment in 2014?

C. Selective Criteria for Rural Broadband Experiments

A key objective in conducting these experiments is to determine whether there is interest in deploying robust, scalable networks for an amount equal to or less than model-based support. The FCC seeks public comment on the selective criteria for those experiments.

i.The FCC proposes that cost effectiveness should be the primary criteria in evaluating which applications to select for the experiment.

  • How should the Commission measure cost effectiveness?
  • If the FCC were to adopt such a selective factor and a scoring system, how many points should be provided to applicants based on the cost effectiveness of their proposal?
  • To the extent an applicant seeks one-time funding as opposed to recurring support, how should that be evaluated in the scoring system, as support amounts determined in the forward looking cost model are recurring amounts?

ii. The FCC suggests that the extent to which the applicant proposes to build robust, scalable networks also be considered when selecting an experiment. In 2011, the FCC adopted an “initial minimum speed benchmark” for recipients of Connect America of 4 Mbps downstream/1 Mbps upstream, but it also specified that some number of locations would receive at least 6 Mbps downstream and at least 1.5 Mbps upstream within five years.

  • If the FCC were to adopt such a selective criteria, how much weight should be given to applicants that propose to offer services more robust than what the Commission established for price cap carriers accepting model-based support?
  • Should the FCC assign varying weights based on the percentage of locations in the proposed project areas that would receive services of varying speeds?
  • Should the FCC also assign additional weight for applicants that propose to offer service with unlimited usage?
  • Should additional weight be assigned to applicants that commit to offering at least 100 Mbps service to schools with 1,000 students or more, with the ability to scale that to 1 gigabit service within several years, and comparable services to libraries?

iii. The FCC floats a third criteria: the extent to which applicants propose innovative strategies to leverage non-Federal governmental sources of funding, such as State, local, or Tribal government funding.

  • If the FCC were to adopt this criteria, how much weight should be given to applications that leverage non-Federal governmental funding sources?

iv. High-capacity connectivity to Tribal lands is the fourth criteria proposed by the FCC.

  • If the Commission were to adopt this criteria, how much weight should be given to applications that propose to serve Tribal lands?

The FCC also seeks more specific comment on how the mechanics of the scoring system would function. What role, if any, should there be for more subjective evaluations of the financial and technical qualifications of applicants, or of which proposals provide the best value for requested funding? For instance, should there be flexibility to deviate from the scoring system in order to achieve diversity of projects, both in terms of geography and types of technologies?

The FCC requests public comment on what information it may be useful to include in the formal proposals for rural broadband experiments. This could include:

  • the number of proposed residential and small business locations to be served within eligible census blocks in the relevant census tract;
  • the number of health care providers, schools and libraries that are physically located within the eligible census blocks;
  • whether the proposal includes the provision of service on Tribal lands and, if so, identification of the Tribal lands to be served;
  • the planned service offerings that would be offered to residential and small businesses, and such anchor institutions, with details regarding the proposed speeds, latencies, usage allowance (if any), and pricing of such offerings (To the extent the applicant proposes to offer service of differing characteristics within the project area, it would be useful to specify the percentage of locations that would have access to the varying levels of service. For instance, if it proposes to deploy a network that would be capable of delivering speeds of 20 Mbps downstream to fifty percent of the locations in the project area, and at least 10 Mbps to the remaining locations, that could be spelled out in the application.)
  • whether the services offered to residential consumers would be sufficiently robust to utilize advanced educational and health care applications;
  • when such services would be available to consumers, businesses and such anchor institutions (the planned deployment schedule);
  • whether the infrastructure can be upgraded later to offer greater throughput (i.e., speeds) and more capacity for each user at a given price point;
  • how network speeds and other characteristics can be measured;
  • whether any discounted services would be offered to specific populations, such as low-income households or customers on Tribal lands;
  • proposed strategies for demand aggregation;
  • proposed strategies for addressing barriers to adoption (e.g., whether the applicant proposes to offer digital literacy training or equipment to subscribers);
  • whether and how other service providers can use the facilities constructed; availability and cost of backhaul and other assets required for project success;
  • whether constraints in middle-mile connectivity may limit the services offered;
  • whether the applicant plans to rely in part on financing from non-federal governmental institutions (e.g., State, regional, Tribal, or local funding; State universal service fund; private foundations);
  • whether the applicant expects to have access to resources that will contribute to project success, such as in-kind contributions, access to cell towers, poles and rights of way, expedited permitting, or existing authorizations;
  • information regarding the proposed network to be deployed and the technologies to be utilized (e.g., wireline, fixed wireless, or mobile wireless);
  • how the applicant proposes to offer voice telephony service to customers at rates reasonably comparable to rates charged for similar services in urban areas; and
  • the amount of Connect America support requested (total and per location) and the time period over which funding would be provided.

D. Additional Considerations for Rural Broadband Experiments

The rural broadband experiments will focus on areas where end users lack Internet access that delivers 3 Mbps downstream/768 kbps upstream. The FCC seeks comment on specific measures to implement that objective.

  • What specific numerical measure should be used to determine whether the extent of competitive overlap is de minimis?
  • Since unserved locations will not neatly align with census block or census tract boundaries, what measures should the FCC take to ensure that federal funds are focused on bringing next generation networks to the unserved?

Should the FCC limit the amount of support available in census tracts?

The FCC seeks public input on allowing applicants for funding awarded through this rural broadband experiment to propose to serve partially-served census blocks.

The FCC seeks comment on any additional rules or requirements it should adopt in the context of rural broadband experiments.

  • Should a condition of participation be offering discounted broadband services to low-income consumers?
  • For applicants whose service areas include Tribal lands, should a condition of participation be offering service to residents and anchor institutions on Tribal lands?
  • Should a condition of participation be to offer to connect community-based institutions, such as schools, libraries, and health care providers, within the project area with high-capacity services appropriate for educational or healthcare activities?
  • To the extent an applicant fails to meet the conditions of its experiment, should facilities built using universal service funding be made available to others?

E. Rural Healthcare Broadband Experiments

The FCC is inviting experiments that would explore how to tackle the challenges of universal access in rural areas and seeks public input on experiments that focus on the implications of the IP Transition on health care facilities and their patients.

The FCC proposes funding rural healthcare experiments out of the $50 million currently authorized for its skilled nursing facility pilot program. The FCC has previously decided to set aside that amount of one-time support for testing broadband use in telemedicine. The Commission seeks comment on this proposal and other options that would not impact the size of the Universal Service Fund.

The FCC proposes to use the application process described above for the rural broadband experiments for any healthcare experiments. To the extent parties suggest the Commission use different processes for a healthcare experiment, they should identify with specificity which aspects of the process should be modified and why.

The FCC seeks comment on the specific selective criteria for a healthcare broadband experiment.

  • How many projects should be funded, and how should applications be prioritized?
  • What auditing and record keeping measures should be in place for any such experiment to protect against waste, fraud and abuse?
  • Are there specific ways in which the FCC’s experience with the Rural Health Care Pilot Program or other universal service pilot programs should be reflected in the evaluation of proposals or the operation of the experiments?
  • Are there requirements under the existing rural health care mechanism (either the Telecommunications Program or the new Healthcare Connect Fund), or other universal service programs, that would be implicated by such experiments? If so, commenters should identify those rules with specificity and indicate how experiments would need to be tailored to such rules, or explain whether and how those rules should be waived or modified.

Finally, there are questions of legal authority. The FCC asks if Section 254 of the Telecommunications Act of 1996 gives the Commission the authority to fund experiments that focus on providing advanced telecommunications and information services to consumers in rural areas, with a particular focus on deploying broadband that is sufficient to meet consumers’ healthcare needs.

1. A rate-of-return carrier is one that is allowed to set rates on its various products and services so that it earns no more than the rate-of-return authorized by the FCC.

By Kevin Taglang.