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There is a positive and significant correlation between broadband adoption growth and Affordable Connectivity Program (ACP) enrollment. As of December 2022, ACP was aiding one in every eight residential broadband connections in metro and urban counties in the United States, many of them new subscribers. New analysis of the 2022 American Community Survey (ACS) and ACP enrollment data points to important findings as Members of Congress consider additional funding for ACP.
- First, places that have experienced strong broadband adoption growth in recent years generally have higher-than-expected rates of ACP enrollment, pointing to the likelihood that ACP has had an impact on that growth.
- Second, places where ACP enrollment growth was strong throughout the 2022 calendar year tend to have above-average broadband subscription levels in 2022 data.
As members of the New Democrat Coalition, we write to advocate for the inclusion of $6 billion in additional funding for the Affordable Connectivity Program (ACP) in any government funding package, to reflect the President’s Fiscal Year 2024 emergency supplemental funding request. The ACP provides critical financial assistance to help American households afford broadband internet services. Access to high-speed and affordable broadband is vital to participating in our 21st-century economy. Communities without sufficient internet connectivity struggle to keep pace in a rapidly changing world increasingly dependent on technology. The New Democrat Coalition is committed to closing this digital divide and the ACP is a necessary tool to accomplish this goal. Failure to renew funding for the ACP would once again make low-cost broadband internet service unaffordable for millions of families, resulting in a significant loss of internet connectivity nationwide. This would be a significant step backwards in the progress Congress has made to connect more Americans to the internet through additional federal broadband investments. The loss of the ACP would also reduce the efficacy of Congress’ groundbreaking $42 billion investment in the Broadband Equity, Access, and Deployment (BEAD) program. A recent study found that the ACP reduces the subsidy amount needed to incentivize broadband deployment in rural areas by 25 percent per-household.1 The ACP is necessary to maximize BEAD program dollars intended to build out our nation’s broadband infrastructure and ensure that no community gets left behind. [In all 70 Members of Congress signed the letter.]
The National Telecommunications and Information Administration (NTIA), the agency responsible for administering the Broadband Equity, Access, and Deployment (BEAD) Program, provided notice of a conditional programmatic waiver of the letter of credit requirements set forth in the BEAD Program Notice of Funding Opportunity (NOFO). The BEAD NOFO requires Eligible Entities to establish a model letter of credit substantially similar to the model letter of credit established by the Commission in connection with the Rural Digital Opportunity Fund. NTIA has determined that, for good cause shown, and in the best interest of the Federal Government, a conditional programmatic waiver of the letter of credit obligation should be granted. The waiver modifies the letter of credit requirement in the following ways:
Allow Credit Unions to Issue LOCs. The NOFO requires subgrantees to obtain a LOC from a U.S. bank with a safety rating issued by Weiss of B− or better. The waiver permits subgrantees to fulfill the LOC Requirement (or any alternative permitted under the waiver) utilizing any United States credit union that is insured by the National Credit Union Administration and that has a credit union safety rating issued by Weiss of B− or better.
Allow Use of Performance Bonds. The waiver permits a subgrantee to provide a performance bond equal to 100% of the BEAD subaward amount in lieu of a letter of credit, provided that the bond is issued by a company holding a certificate of authority as an acceptable surety on federal bonds as identified in the Department of Treasury Circular 570.
Allow Eligible Entities to Reduce the Obligation Upon Completion of Milestones. The waiver allows an Eligible Entity to reduce the amount of the letter of credit obligation below 25% over time, or reduce the amount of the performance bond below 100% over time, upon a subgrantee meeting deployment milestones specified by the Eligible Entity.
Allow for an Alternative Initial LOC or Performance Bond Percentage. The NOFO requires that the initial amount of the letter of credit be 25% of the subaward (or the initial amount of the performance bond be 100% of the subaward under the option described above). The waiver allows the initial amount of the letter of credit or performance bond to be 10% of the subaward amount during the entire period of performance when an Eligible Entity issues funding on a reimbursable basis consistent with Section IV.C.1.b of the NOFO and reimbursement is for periods of no more than six months each.
Buried deep within the stunning array of broadband subsidy provisions contained in the Infrastructure Investment and Jobs Act of 2021 lies Section 60506—labeled “Digital Discrimination”—which requires the Federal Communications Commission (FCC) to issue rules to prevent “digital discrimination of access based on income level, race, ethnicity, color, religion, or national origin,” while taking into account the issues of “technical and economic feasibility.”1 Although Section 60506 perhaps represents a sign of our political times,2 there simply is no credible evidence of a racial disparity in broadband deployment. Minorities have equal or better availability than do White Americans. However, affordability holds back more widespread broadband adoption. Adoption subsidies, therefore, are the more fruitful path to increasing and maintaining broadband adoption. This is, of course, obvious. Broadband is nearly universally available, with 92% having service at the 100/20 Mbps level or better. Since the lack of deployment is largely a rural issue, the argument that minorities, who tend to live in urban areas, have less access to broadband is implausible. Adoption in the home, however, was 75% in 2021, and has grown slowly in the past few years. A lack of interest is certainly the key driver of a lack of adoption, but affordability is relevant at the margins, and low prices may have some effect even those without present interest in the service. FCC resources devoted to Digital Discrimination would be better spent on improving the efficacy of the Affordable Connectivity Program.
Virginia will be receiving nearly $1.5 billion in Broadband Equity, Access, and Deployment (BEAD) Program rural broadband funding—one of the higher amounts allotted in the program. Virginia’s goal is to ensure universal service, and as Dr. Tamarah Holmes, director of the state’s broadband office, noted, “Before federal funding was made available, our biggest challenge to reach this goal was money.” While some states only recently established broadband offices, Dr Holmes has been in her position since 2019 and has overseen the office grow from just herself to a 15-person team within the Department of Housing and Community Development (DHCD). Virginia’s broadband program originated in 2017, when $1 million was allocated for the creation of a broadband deployment program whose sole purpose would be to supplement construction costs for the private sector. The Virginia Telecommunication Initiative (VATI) was developed and launched under Dr Holmes. VATI has already allocated approximately $900 million to serve almost 400k locations. Much of this was facilitated by the American Rescue Plan Act, which made funding available to states that could be used for broadband. Most recently, VATI handed out $59.5 million in broadband funding.
The California Department of Technology (CDT) will pay Lumen Technologies $400 million to build out 1,900 miles of network infrastructure as part of the state’s Middle Mile Broadband Initiative. The Lumen award represents two of 11 total leases, joint-build or purchase agreements from the CDT with several companies that will contribute to the initiative’s open access middle-mile network. Open access networks, which are deployed by one company and leased to multiple internet service providers (ISPs), are starting to gain traction in the U.S. The middle mile is the portion of networks that connects the last mile (connection to homes or businesses) with the network backbone (transmission lines linking global internet networks). Lumen will be pulling new 288 count fiber into existing conduit on behalf of the state for the entire 1,900 miles. This will bring open-access middle mile connectivity by Lumen to “hundreds of California communities by the end of 2026,” according to the company.
On October 19, the Federal Communications Commission (FCC) voted 3-2 to issue a Notice of Proposed Rulemaking (NPRM) to reinstate the agency’s 2015 decision that brought internet service providers (ISPs) under the agency’s jurisdiction as Telecommunications Carriers. This action is necessary because the Trump FCC repealed the previous rule in 2018 at the request of the ISPs. Predictably, the telecom industry and its allies in Congress have come out with guns blazing in opposition to the recent FCC proposal. Also, predictably, the debate is being mischaracterized around a few tried-and-true buzz phrases that obscure the importance of what is being proposed. For the longest time, both advocates and opponents of net neutrality have spoken in terms of preventing “blocking, throttling, and paid prioritization” by ISPs. It is, however, a mischaracterization of the policy challenge that cheapens the importance of the real issue: that the nation’s most important network has no public interest supervision. The issue isn’t “net neutrality.” The issue isn’t even about an “open internet.” The issue that is once again before the FCC is whether those that run the most powerful and pervasive platform in the history of the planet will be accountable for behaving in a “just and reasonable” manner. The real issue is why such an important pathway on which so many Americans rely should be without a public interest requirement and appropriate oversight.
The former head of search at Google told colleagues in February 2019 that his team was “getting too involved with ads for the good of the product and company,” according to emails shown at the Justice Department’s landmark antitrust trial against the company. Google maintains a firewall between its ads and search teams so that its engineers can innovate on Google’s search engine, unsullied by the influence of the team whose goal is to maximize advertising revenue. But in February 2019, Google internally declared a “Code Yellow” amid concerns the company might not meet its goals for search revenue for the quarter. As part of the emergency, which lasted for seven weeks, engineers from Google’s search and Chrome browser teams were reassigned to figure out why user queries had slowed.
The House of Representatives will be led by Rep Mike Johnson, who represents Louisiana’s 4th district. A previous Chair of the Republican Study Committee and a Vice Chair of the House Republican Conference, Johnson has also served on the House Judiciary and Armed Services Committees. What could this mean for the Congressional broadband agenda? Speaker Johnson is largely in line with his Republican colleagues on most broadband issues. He voted against the 2021 infrastructure Investment and Jobs Act, but he has supported federal broadband spending, especially the Federal Communications Commission's Rural Digital Opportunity Fund, which allocated millions of dollars to Louisiana. While Johnson’s position on the Affordable Connectivity Program (ACP) is unclear, 29% of households in his district are enrolled. It is uncertain where he stands on the White House’s request for an additional $6 billion to fund the program. Speaker Johnson opposes the reinstatement of net neutrality and wants to codify the Trump administration’s repeal of the consumer protection rule.
Nov 1––Truth, Trust, and Democracy: Leadership in the Information Ecosystem (Shorenstein Center)
Nov 2-3––Michigan Broadband Summit (Merit Network)
Nov 14––The Connect20 Summit (Network:On)
Nov 14––Regulating digital industries (Brookings)
Benton (www.benton.org) provides the only free, reliable, and non-partisan daily digest that curates and distributes news related to universal broadband, while connecting communications, democracy, and public interest issues. Posted Monday through Friday, this service provides updates on important industry developments, policy issues, and other related news events. While the summaries are factually accurate, their sometimes informal tone may not always represent the tone of the original articles. Headlines are compiled by Kevin Taglang (headlines AT benton DOT org), Grace Tepper (grace AT benton DOT org), and David L. Clay II (dclay AT benton DOT org) — we welcome your comments.
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