December 2016

Broadband and High-speed Internet Access in the Fourth District

Broadband Internet service is now considered by many to be a new form of infrastructure, and Federal regulators confirmed the importance of broadband access to rural communities in their recently updated guidance for the Community Reinvestment Act (CRA). This report documents the availability of high-speed Internet access in the Fourth Federal Reserve District, which comprises all of Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia, using a series of maps and charts. While our analysis clearly shows there is limited broadband access in rural parts of the Fourth District, it shows that urban low- and moderate-income (LMI) areas also have limited access. As such, a case could be made to include investments in communications infrastructure in urban areas as CRA eligible based upon essential community needs.

CenturyLink says E-Rate funding should not be used to fund residential broadband

CenturyLink says a request from a consortium of parties, including Microsoft, to extend E-Rate services to rural students' homes is not in line with the way the statute was written. The telecommunication company said in an Federal Communications Commission filing that if the FCC granted the petitions, the regulator would actually cause more harm than good to the E-Rate program. “Despite good intentions, however, the petitions to use E-rate funded bandwidth without cost allocation would be inconsistent with the statute, raise too many problems, create too many distortions, and create too many risks for the E-rate program,” CenturyLink said. “The petitions also cannot be granted by the Bureau on delegated authority, but need review and rulemaking by the full commission.”

Telecom Industry Sees Relief in Trump Policy Agenda

The telecommunications industry is embracing the idea of a Trump administration. President-elect Donald Trump’s promises to reduce corporate taxes and to eliminate regulations have been welcomed by executives from an industry facing intense oversight. Four of the biggest players generate more than $340 billion in annual revenue from largely domestic operations. One key area for optimism is taxes. Verizon Communications chief Lowell McAdam recently expressed hope that the Trump administration will be able to lower the corporate rate. “We are not planning on getting into the 15% range; that would be great if it did,” McAdams said.

Sens Propose TV Station Relocation Fund

The National Association of Broadcasters is praising a bipartisan effort by a handful of senators to make sure there is enough money to cover the costs of TV station moves after the spectrum auction and that stations can't be forced to meet a moving deadline for reasons beyond their control. But it would also impose a "penalty" on stations that did not meet the deadlines of a phased transition absent those extenuating circumstances. There is currently a $1.75 billion relocation fund, which is looking larger every time the Federal Communications Commission reduces the amount of spectrum it is reclaiming from broadcasters in the auction and thus increases the space in which to repack stations—the FCC is now in its third reduction.

But in case that does not prove sufficient, Sens Jerry Moran (R-KS), Brian Schatz (D-HI), Roy Blunt (R-MO), Tom Udall (D-NM), Deb Fischer (R-NE), and Richard Blumenthal (D-CT) have drafted a bill, the Viewer Protection Act of 2016, that would create a Viewer Protection Fund. Rep Frank Pallone (D-NJ) proposed a similar discussion draft last January, putting a figure of $1 billion on the fund. The senators did not have a figure in mind, at least not in the draft NAB supplied, but simply such sums as "are necessary to provide reimbursements for relocation costs to 1 or more broadcast television licensees" if the initial funds are exhausted.

Jessell Alert: Spectrum Auction Terribly Sick

[Commentary] Can you believe this? A year ago, the Federal Communications Commission teased broadcasters with prospective incentive auction opening bids for TV stations ranging from $900 million to $1.2 million. Now, going into Stage 4, with the money broadcasters want and what wireless carriers are willing to pay far, far apart, there's a possibility the whole enterprise may come to naught. If so, the wireless industry should be made to reimburse the FCC for the millions (tens of millions?) of dollars that the agency has spent creating, designing and executing the auction over the past seven years.

Chairman-elect Walden Names Senior Staff for House Commerce Committee

House Commerce Committee Chairman-elect Greg Walden (R-OR) announced that Mike Bloomquist, Karen Christian, Peter Kielty, and Paul Edattel will continue to serve the committee. All are longtime veterans of Capitol Hill.

Bloomquist will serve as Deputy Staff Director for the Committee. He has served in this position since August 2015. In addition, he previously served as the Committee General Counsel, Deputy General Counsel, as well as General Counsel to the 2011 Joint Select Committee on Deficit Reduction. Further, Mike has spent time in private practice, at the Committee on Science, and in the Office of the US Department of the Interior. Christian will continue as Committee General Counsel, a position she has held since October 2014. Previously, she served as Chief Counsel for the Oversight and Investigations Subcommittee from 2012-2014, and was a member of the O&I staff since 2006. Karen spearheaded the Committee’s oversight of the Healthcare.gov failure and the federal loan guarantee to Solyndra. Her previous experience includes serving as counsel to the Committee on House Administration, a clerkship with a US District judge and time spent in private practice. Kielty will serve as Deputy General Counsel of the Committee. Kielty is a 15-year veteran of the Committee, and has served as Deputy General Counsel since 2012. Peter has advised on the parliamentary and jurisdictional matters before the Committee. Edattel will continue to serve as Chief Counsel to the Subcommittee on Health. Paul started with the Committee in 2011 and has served as Chief Health Counsel since 2016, after serving Speaker John Boehner as his health policy advisor. Paul also served as a Legislative Director in the House of Representatives before joining the Committee.

Google Makes So Much Money, It Never Had to Worry About Financial Discipline—Until Now

Critics, including more than a dozen former top Google executives who spoke on the condition of anonymity because they signed nondisclosure agreements, describe a company having trouble balancing innovation and its core business, search advertising. Over the 12 months ended in September, Google’s ad business accounted for 89 percent of Alphabet’s revenue, or $76.1 billion. As one ex-executive puts it, “No one wants to face the reality that this is an advertising company with a bunch of hobbies.”