Tuesday, November 7, 2023
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Universal Service Fund
Media & Democracy
In the bi-partisan 2021 Infrastructure Investment and Jobs Act, Congress decided to provide a larger Affordable Connectivity Program (ACP) benefit in high-cost areas—up to $75/month, compared to the standard $30/month benefit. Last week, the Federal Communications Commission (FCC) quietly announced that service providers could start filing applications on January 17, 2024, to become eligible to receive this larger benefit. This new benefit is unlikely, however, to significantly increase ACP outlays in the coming year because it only is available in limited areas, where there are few consumers, and few service providers may choose to participate.
[Carol Mattey is a former senior official from the Federal Communications Commission. She currently is the principal of Mattey Consulting LLC, which provides strategic and public policy advisory services to broadband providers and other entities seeking funding for broadband.]
The NTIA Reauthorization Act of 2023 (H.R. 4510) would authorize the appropriation of $62 million for fiscal years 2024 and 2025 for the National Telecommunications and Information Administration (NTIA) to carry out its operations. The bill would codify some existing responsibilities and programs of the NTIA, such as the Office of Public Safety Communications and the Office of International Affairs. H.R. 4510 also would require the NTIA to carry out other responsibilities including a cybersecurity literacy campaign and studying the cybersecurity of mobile service networks. In addition, the bill would require NTIA and the Federal Communications Commission to publish certain information if the FCC proposes actions or issues final rules about the reallocation of radio spectrum that could affect how the federal government uses that spectrum. H.R. 4510 would establish two interagency groups related to spectrum policy in the federal government. Finally, the bill would require the NTIA and several other federal agencies, including the FCC and Department of Agriculture (USDA), to establish a national strategy to close the digital divide. CBO estimates that implementing H.R. 4510 would cost $129 million over 2024-2028. The bill would authorize the appropriation of $62 million for fiscal years 2024 and 2025 for the administration of the NTIA. The Congress provided $62 million for the NTIA in 2023. Based on the historical spending patterns for those activities, CBO estimates that implementing the bill would cost $124 million over the 2024-2028 period. Using information from the agency, CBO expects that the NTIA would require more than $62 million each of those two years to maintain its current operations and fully implement the additional responsibilities in the bill.
Universal Service Fund
NTCA–The Rural Broadband Association launched its new “Broadband Built to Last” ad campaign, which aims to educate policymakers and the public on the critical role the Universal Service Fund plays in getting and keeping rural consumers connected to high quality, affordable broadband service.
In October 2023, the Biden Administration called on the Federal Communications Commission to implement provisions of the Infrastructure Investment and Jobs Act. The FCC will vote on Nov 15 on new rules; I oppose the plan for several reasons:
- President Biden’s plan hands the Administrative State effective control of all Internet services and infrastructure in the country.
- President Biden’s plan sweeps entire industries within the FCC’s jurisdiction for the first time in the agency’s 90-year history.
- President Biden’s plan allows the FCC to impose unfunded build mandates on ISPs and unlimited monetary fines on every covered entity.
- President Biden’s plan includes price controls.
- President Biden’s plan adopts an expansive and disfavored theory of liability that Congress neither directed nor authorized the FCC to adopt.
The state of South Dakota has set a high bar for applicants seeking rural broadband funding in the ConnectSD Broadband Development Program. For example, the state sees fiber broadband as the “gold standard” in broadband technology. “The state has made the policy decision to approve and fund future-proof fiber projects...Other technologies such as DSL copper, fixed wireless and satellite, while they have their place in the ecosystem, are considered temporary ‘stop gap’ or ‘the only option’ technologies,” said the South Dakota Governor’s Office of Economic Development, which is administering the program, in application materials for the program. The state also “encourages” providers to contribute at least 50 percent in matching funds except when there are extenuating circumstances. In addition, providers that contribute more than 50 percent of project costs will get one extra point for every extra percentage point above 50 percent, up to 25 extra points in the scoring system that will be used to determine awardees. The technologies used must be capable of delivering at least 250 Megabits per second (Mbps) downstream and 20 Mbps upstream. Applicants get five extra points for deploying technology capable of providing 250/100 Mbps speeds, 10 extra points for 250/250 Mbps, 15 extra points for 500/500 Mbps and 20 extra points for symmetrical gigabit speeds. Eligible areas are those lacking 100/20 Mbps service.
One of Consolidated Communications’ institutional investors is encouraging other shareholders not to vote in favor of the proposed Consolidated sale to Searchlight Capital Partners and British Columbia Investment Management Corporation. The investor, Wildcat Capital Management, owns about 3 million shares of Consolidated stock, or between 2 and 3 percent of the company. That makes Wildcat the fifth largest independent stockholder, according to Wildcat. In an open letter to the Consolidated board of directors, Wildcat argued that Consolidated is worth substantially more than the $3.1 billion that the potential acquirers have offered to pay. According to Wildcat, Consolidated is worth more like $4 billion.
Charles Dickens opened A Tale of Two Cities writing that “It was the best of times, it was worst of times”. Therein may lie some helpful context for understanding where our country finds itself today. I don’t propose to cover the entire issues waterfront in this brief piece, but will instead focus on a few of the things I see dragging our country and our government down today. For the purposes of this essay, I will include telecommunications and media, Congress, and the courts. To start off on the positive, there’s some really good news at the Federal Communications Commission (FCC). After more than 2-1/2 years of deadlock because there was no majority at that agency, the Senate has finally confirmed the very able and highly-regarded Anna Gomez as the fifth Commissioner, opening the way to restore the vitality of the agency and to tackle issues like network neutrality, media consolidation, consumer protection, privacy, artificial intelligence, and others that couldn’t move with a 2-2 split. All the while, these issues became evermore pressing. Other nations are way ahead of us in designing privacy protections, transparency, and other regulatory oversight to protect their citizens. But thanks to the largely unchecked power of our communications behemoths, we seem unable to move from talk-talk to act-act.
[Michael Copps served as a commissioner on the Federal Communications Commission from May 2001 to December 2011 and was the FCC's Acting Chairman from January to June 2009.]
Altafiber, formerly known as Cincinnati Bell, has been busy in 2023 with its fiber buildout—both within its incumbent territory and in expansion markets. Outside its footprint, the operator plans to reach 400,000 locations with fiber across Ohio, Kentucky, and Indiana. Mark Fahner, altafiber’s VP of corporate development, didn’t provide a timeline for the 400,000 out-of-footprint target, just noting altafiber will reach that goal “over the course of our business plan.” As for which markets it’s eyeing, he said the company is looking at “a mix” of rural and suburban communities. “It’s really opportunistic as much as anything, where you know the environment’s right and we like to build tight relationships with the communities,” he said. Many (but not all) of those relationships are public-private partnerships.
The rapid spread of fiber broadband connections in emerging markets is set to drive growth in those countries’ digital economies, according to the Financial Times-Omdia Digital Economies Index. India, Brazil, Kenya, and Mexico are among the countries highlighted by Omdia analysts as experiencing rapid take-up of fiber broadband, which is faster and more reliable than mobile or older copper-wire broadband connections. The Covid-19 pandemic, which left millions of people confined to their homes and reliant on the internet for work and entertainment, created a “tipping point” that led to “a greater appreciation for not just any connection but a high-quality connection," according to Omdia chief analyst Mike Roberts. “A lot of countries [said], OK, we’re just going to have to go for it and get this done,” he adds, referring to the cost of installing the technology. These costs can be significant, but can be reduced through “favorable regulation”. Then, once the network has been created, fiber broadband tends to be cheaper to operate and maintain, including much lower energy costs.
Nov 5-7––Telecom Executive Policy Summit (NTCA–The Rural Broadband Association)
Nov 14––The Connect20 Summit (Network:On)
Nov 14––Regulating digital industries (Brookings)
Nov 15––U.S. Broadband Summit (Fierce)
Nov 15––Code to Conduct in AI: Open Source, Privacy, and More (Mozilla)
Nov 17––Maternal Health Roundtable (FCC)
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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