Friday, January 6, 2023
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News From the FCC
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News From the FCC
Federal Communications Commission Chairwoman Jessica Rosenworcel announced the agenda for the January 26, 2023 Open Commission Meeting. The FCC will consider:
- A Notice of Proposed Rulemaking that would consider establishing reporting and notice requirements for service outages potentially affecting the 988 Suicide & Crisis Lifeline.
- An Order on Reconsideration, Second Report and Order, Order, and Second Further Notice of Proposed Rulemaking which would rescind rules requiring support for the Rural Health Care Telecommunications Program to be calculated using a database, improve processes for invoicing and program caps, and propose additional enhancements to calculations of support and a mechanism to allow the participation of newly-eligible health care providers.
- A restricted adjudicatory matter.
- An enforcement action.
On Friday, December 30, 2022, the Federal Communications Commission released its third Communications Marketplace Report. In the RAY BAUM’S Act of 2018, Congress requires the FCC to assess the state of competition in the communications marketplace. Every two years, the FCC must evaluate competition to deliver voice, video, audio, and data services among providers of telecommunications, providers of commercial mobile service, multichannel video programming distributors, broadcast stations, providers of satellite communications, internet service providers (ISPs), and other providers of communications services. The FCC last completed a marketplace report in 2020 under then-Chairman Ajit Pai. Here we focus on the FCC's findings concerning broadband, a market, the commission notes, that is "on the cusp of generational change" because of the $65 billion that the Infrastructure and Investment and Jobs Act is investing in broadband adoption and deployment throughout the country.
"The single most critical question facing cable investors is what happens to broadband subscriber growth from here," said Craig Moffett, the influential principal and senior analyst at MoffettNathanson. "If the problem facing cable broadband today is saturation, then subscriber growth likely flatlines from here. If the problem is market-share loss, it probably goes negative.” Moffett said new government figures give him the penetration rate for wired broadband in the US. The rate, which he figures is 87.4% of broadband-available homes, suggests the broadband industry is saturated, a better outcome than finding an industry suffering a share loss to fixed wireless. Moffett’s previous estimate was 81.5% penetration. Moffett said the latest data from the Federal Communications Commission “strongly supports the ‘saturation’ thesis, in our view. What’s left to penetrate (of what has already been wireline enabled) will have to compete with headwinds that include poverty, illiteracy and, of course, relevance. We’ve seen estimates that suggest that fully half of broadband-enabled but unsubscribed homes don’t own computers. We don’t suggest that 87% penetration of homes is a ceiling … but it is likely not far from one.”
The $8.6 billion Universal Service Fund, a linchpin of US communications funding since the late 1990s, helps more than 8 million people afford phone and internet service. The conservative advocacy group Consumers’ Research filed lawsuits in three US courts saying the program should be invalidated because its funding is set by regulators, rather than by Congress, which has taxing authority. There’s a high chance one of the courts will strike down the program in 2023, shifting the battle to the Supreme Court, where justices skeptical of US regulatory agencies could hand the challengers a win. If the program is declared unconstitutional “that becomes a catalyst” for Congress to act, said Matthew Schettenhelm, a Bloomberg Industry analyst. “That hikes the risk for big-tech platforms, since one of the most prominent proposals is to make them pay into the program for the first time.” The Universal Service Fund is overseen by the Federal Communications Commission. The program takes in fees from telephone calls by consumers and spends that money to help needy people pay for service, both wireless and fixed lines. It’s also used to build telecommunications networks in hard-to-reach areas, and to connect libraries and rural health care clinics.
Governor Brian Kemp (R-GA) announced over $234 million in 29 preliminary grant awards for broadband internet expansion through the Capital Projects Fund Grant Program. These awards will improve connectivity for communities, households, businesses, and anchor institutions in 28 Georgia counties. When combined with significant capital matches from the awardees, almost $455 million will be invested to serve over 76,000 locations in communities with some the greatest need for high-speed internet access. The 29 awardees include 12 different internet service providers comprised of electric membership cooperatives, large telecommunications companies, and local Georgia-based companies. The state will open a second round of the Capital Projects Fund Grant Program for the five eligible counties that did not receive an award in the Spring of 2023 (Calhoun, Echols, Johnson, Miller, and Webster Counties). (See full list of awardees)
The economics of rural broadband are challenging for private internet service providers (ISPs) and governments alike. The small populations spread out over large geographic areas make installing infrastructure extremely expensive and offer a limited customer base to offset the costs. As states work to connect these high-cost areas to broadband, they are increasingly turning to a partnership model, often called a regional utility district, as a potential solution. These partnerships involve multiple towns or municipal entities joining together to form a new local government entity for the provision of utility services. Although using regional utility districts for broadband is a relatively new model, in some states, including Vermont, this strategy already has a long history of delivering other essential services, such as water and sewer, to rural communities. In 2015, after a local initiative demonstrated that the model could also work for high-speed internet in the state, the Vermont General Assembly passed legislation allowing towns and cities to collaborate and form communications union districts (CUDs) to provide broadband service. In the years since, CUDs have become a central component of Vermont’s efforts to close the digital divide.
The purpose of this research is to provide a review of ongoing public safety mobile broadband projects in which mobile operators play a key role. The results show that mobile operators have new business opportunities in the public safety market. Their existing mobile networks can be used for public safety services with certain enhancements. Within existing projects, mobile operators have different business models. The two analysed models were found to require different resources and offer different business opportunities for mobile operators. Procurement authorities responsible for selecting business models are encouraged to pay attention to the choice of model based on, for example, strategic objectives. Very little research has been done on the business opportunities of mobile operators in the public safety market. In this area, this study lays the groundwork for new research. Procurement authorities can use the results when deciding on the business model. Mobile operators can benefit from these results by better understanding their own roles in public safety projects and when assessing the business opportunities of a particular project.
Frontier added 75,000 fiber broadband customers in the fourth quarter of 2022, a new record for the company and 17% more fiber broadband customers than it had at the end of 2021. For the fifth consecutive quarter, fiber broadband customer additions outpaced copper broadband customer losses, resulting in 8,000 total broadband customer net additions in the fourth quarter of 2022.
For the first time in my memory, the Senate does not have the votes to approve the nominated FCC Commissioner, Gigi Sohn [Senior Fellow and Public Advocate at the Benton Institute for Broadband & Society]. This has meant that the FCC has been on hold and we’ve had a two-year deadlock between the two Democratic and Republican Commissioners on any controversial issues. There are a number of FCC initiatives that are on hold until there is a fifth Commissioner:
- The big issue is net neutrality, which says that there should be no discrimination used in delivering Internet content. But everybody understands that the real issue at stake in this discussion is the overall regulation of ISPs. Reintroducing net neutrality means having to reinstate Title II authority or some other similar mechanism to regulate broadband. Re-regulation of broadband is the issue that the big ISPs most strongly oppose. Broadband regulation could result in many new rules that big ISPs would hate, like perhaps outlawing data caps.
- The FCC has needed for years to increase the definition of landline broadband, which still sits at 25/3 Mbps. Equally out of touch is the definition of acceptable 4G cellular broadband set by the FCC at 5/1 Mbps.
- The FCC recently ordered broadband labels that are supposed to inform customers about their home broadband. The FCC got this authority through the IIJA legislation. But oddly, since the FCC doesn’t currently have the authority to directly regulate ISPs, the Commission can be stymied by ISPs that blatantly fail to honestly disclose the facts to the public.
- The FCC is considering spending up to $9 billion on subsidies to improve rural cellular coverage. It’s a great idea, but there needs to be a fifth Commissioner to make sure this isn’t just a handout to the giant cellular carriers and not another boondoggle like RDOF.
- There are probably not the needed votes in the current Commission to impose penalties against ISPs that continue to falsely report to the FCC mapping database.
Stories From Abroad
Internet connectivity continues to speed ahead for people around the world, especially as countries prioritize and improve mobile and fixed broadband networks. The improvement of global median download speeds has been somewhat asymmetrical over the past year on the Speedtest Global Index. Fixed broadband speeds made greater strides over the past year than mobile download speeds, with fixed broadband speeds becoming at least 28% faster and mobile becoming nearly 17% faster from November 2021 to November 2022. Gains in upload speed were even more pronounced with mobile becoming at least 9% faster and fixed broadband becoming at least 30% faster.
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) and Grace Tepper (grace AT benton DOT org) — we welcome your comments.
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