Tuesday, February 22, 2022
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It is Time to Reimagine Lifeline
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Low-income households are spending too much on connectivity. Prior to the pandemic, the Federal Communications Commission’s Lifeline program supported mainly wireless communication services for low-income households; its $9.25/month subsidy resulting in service plans that restricted voice and data usage. To address Americans’ online connectivity needs during the pandemic, Congress directed the FCC to launch the Emergency Broadband Benefit (EBB) program—a historic expansion of financial support for universal service. With the passage of the Infrastructure Investment and Jobs Act, EBB has transitioned to a longer-term Affordable Connectivity Program, a $30-per-month service subsidy for qualifying households. The Affordable Connectivity Program offers the opportunity to take a fresh look at policies to promote online access for low-income people in the United States. In Reimagining Lifeline: Universal Service, Affordability, and Connectivity, published by the Benton Institute for Broadband & Society, I examine data about the tools typical American households have for accessing the internet and how affordable they are, and explore the administrative journey of Lifeline, which is all the more significant because the Universal Service Administrative Company, which administers the Lifeline program, will also administer the Affordable Connectivity Program.
[John B. Horrigan is a Benton Senior Fellow. He is a national expert on technology adoption, digital inclusion, and evaluating the outcomes and impacts of programs designed to promote communications technology adoption and use.]

The Federal Communications Commission adopted a Further Notice of Proposed Rulemaking seeking comment on further reforms to the Rural Health Care (RHC) Program rules to promote program efficiency and ensure that rural healthcare providers receive appropriate levels of funding. Specifically, the FCC is seeking comment on several facets of the RHC Program including:
- Options for determining support in the Telecom Program and potential revisions to program forms and the USAC online portal to improve the quality and consistency of data;
- Ways to improve the accuracy of support provided in the Telecom Program, including changes to the Rates Database, as well as alternative rate determination mechanisms;
- A proposal to reform the Commission’s funding cap rules to more efficiently and effectively handle the internal cap on multi-year commitments and upfront payments in the HCF Program; and
- A proposal to simplify invoicing by harmonizing the process between the Telecom Program and the HCF Program as part of the Commission’s efforts to strengthen protections against waste, fraud, and abuse.

While the recent COVID-response programs are welcomed additions to the effort to connect all people, they are only one part of the total ecosystem required to achieve universal service. The Universal Service Fund continues to be an important part of that ecosystem. Specifically, the Lifeline program’s voice and data and voiceonly subsidies for consumers is not replicated elsewhere, and the Emergency Connectivity Fund program does not reach as far or cover as many needs as the E-rate program. One program does not serve all ends. That is why all of the programs that target vulnerable populations should work together to ensure that varying communication needs are met. For example, people may require voice access for 911 and mobile service for texting and communication on-the-go, robust broadband at home, well-connected schools and libraries, tools to reach K-12 schools as well as higher levels of education, devices, opportunities to learn about digital technology and more. None of the current programs can do all of those things, but all of them should integrate with each other to meet a range of needs.
Free Press Calls on the FCC to Update Its USF Programs and Push for Permanent Funding of the Affordable Connectivity Program

Free Press called on the Federal Communications Commission to reinvent its Universal Service Fund (USF) policies so that millions more people can afford the costs of connectivity in the United States. Free Press urged the FCC and Congress to redraft policies crafted in the late 1990s, and last overhauled more than a decade ago, to reflect the sector’s many changes. Free Press wrote, “the good intentions that fueled that effort are no longer a reliable blueprint in a fundamentally changed marketplace. And however good those original intentions were, their implementation since 1996 has been marked by too many missteps and cascading concessions to incumbents.” The FCC’s high-cost universal-service deployment policies are still structured to benefit legacy telephone monopolies, resulting in massive waste of funds and extra cost burdens placed on consumers. “The Infrastructure Act’s investments take away any last excuses for maintaining these outdated policies,” Free Press writes. “Indeed, Congress recognized as much, and mandated this inquiry so that the Commission could revisit its policies and revise them for the future.”

The Rural Wireless Association noted that the Universal Service Fund is unsustainable as currently constructed. When the 1996 Telecommunications Act was signed into law, voice telecommunications ruled the day and was the primary service supported by the USF. Circumstances have since changed. An explosion of innovation pushed consumers to use more data and demand higher speeds and lower latency. This demand resulted in the need for more spectrum to keep up with the evolving networks and transformed the dominant means of communications from telecommunications voice connectivity to broadband data connectivity. With the passage of the Infrastructure Act that will fund even more broadband deployment across the nation, the USF will need to be able to quickly adapt to be able to support the provision of broadband service to high-cost areas that do not have enough population to create the revenue needed to sustain ongoing operations and maintenance.
RWA recommends three different strategies that the FCC could employ to both protect the sustainability of the USF and ensure that the FCC’s universal broadband goals are met. First, the FCC should transition high-cost support for fixed broadband to ongoing support to maintain the networks that are deployed through the Infrastructure Act funds and through current high-cost programs that are set to conclude on or before 2028. Second, the FCC should develop a model-based support mechanism to enable and sustain 5G mobile networks to replace the reverse auction framework that has been proven to result in unsecure and subpar broadband networks. Third, the FCC should immediately move forward with reforming its USF contribution methodology to include broadband revenue as part of the contribution factor. In addition, RWA proposes that Congress consider legislation that collects a penny at the point of sale for every commercial transaction that takes place using broadband. One hundred trillion commercial transactions would equate to $1 trillion. This money could be used not only for further infrastructure reform and development, but could also be used to bring down the national debt and lower taxes.

In December 2021, Gov. Ton Wolf (D-PA) signed House Bill 2071 to create the Pennsylvania Broadband Development Authority to serve as a one stop shop for all things broadband in Pennsylvania. The office will manage at least $100 million in federal aid to coordinate the rollout of broadband across Pennsylvania. The Pennsylvania Broadband Development Authority is made of an 11-member board. The board includes the secretaries of the Pennsylvania Departments of Agriculture, Community and Economic Development, Education, General Services, and Budget; the executive director for the Center for Rural Pennsylvania; chairperson from the Pennsylvania Utilities Commission; and four legislative members: Rep. Pam Snyder, Rep. Carl Metzgar, Sen. Kristen Phillips-Hill and Sen. John Kane.

A group of rural Michigan advocates are urging state lawmakers to fund and staff the Michigan High-Speed Internet Office. Gov Gretchen Whitmer (D-MI) created the office in June 2021 with the aim of expanding broadband internet access to more residents. But the office as yet has no budget and therefore no full-time staff. "We need the Michigan legislature to act and approve the funding and full-time employees as requested by the Department of Labor and Economic Opportunity for our Michigan High-Speed Internet Office," said Joanne Galloway, executive director of the Center for Change Northern Michigan Advocacy. "I'm advocating for funding and full-time staff for the Michigan High-Speed Internet Office," said Levi Teitel, rural communications coordinator for Progress Michigan. "All 50 states are receiving lots of federal funding for broadband development. Our neighboring states already have staff in place in offices. We're going to be competing with others all across this country for access to all of the supplies to do construction (of internet infrastructure) and all of the labor force," said Galloway. Broadband service has expanded rapidly in recent years in some parts of Michigan, but the state's most rural areas still have limited access. That puts farmers, students and businesses at a disadvantage to their competitors in places with faster access. "The need is dire," said Gary Wellnitz, northern Michigan field representative for the American Federation of Teachers — Michigan.

UScellular lost more postpaid customers in the fourth quarter of 2021 – about 12,000 – on top of the 8,000 it lost in the third quarter of 2021. “We have to continue to do better,” said UScellular President and CEO Laurent Therivel. But the company's share of gross adds was quite strong in 2021, particularly in the fourth quarter. “It’s really a churn story,” Therivel said. “The churn dynamic is going to be affected by the upgrade promotions. We’re going to be launching a new approach to upgrades in the second quarter,” driven by a personalization engine that will do much more targeted digital outreach to customers, he said. The plan calls for continued investment in growth areas like prepaid, business and government and towers. And the expectation is the recently passed Infrastructure Investment and Jobs Act (IIJA) will go a long way toward helping meet its goals. UScellular is unique among wireless carriers in that it still owns its towers and while it’s not a huge piece of revenue at this time, it expects that will change. And in terms of fixed wireless, UScellular is clearly on that train, as are its bigger rivals in wireless, such as T-Mobile and Verizon, which are aggressively marketing their 5G home broadband services like never before. “We’re rolling out that fixed wireless service without infrastructure subsidies,” Therivel said. “We’re doing so steadily, gradually. We’ve got the service live in market in a couple of states. You can expect to kind of see some gradual expansion there.”

TDS Telecom added 35,000 new fiber-enabled locations in the fourth quarter of 2021, bringing its total fiber-enabled addresses to 400,000 at year-end. That is up significantly from the 20,000 new fiber locations the company added in the third quarter. The company added 86,000 new fiber addresses in 2021, which is lower than its target of adding 150,000 new addresses in the year. However, TDS Telecom SVP and CFO Vicki Villacrez warned investors that the company would miss that target because of permitting problems and contractor delays. Villacrez said that TDS continues to struggle with supply chain problems, permitting issues and scheduling delays but nevertheless it is committed to expanding its fiber footprint as rapidly as possible. TDS grew service addresses 7 percent year-over-year from 1.302 million in fourth quarter of 2020 to 1.387 million in fourth quarter 2021. In addition, the company is now offering 1-Gig services to 58 percent of its footprint. TDS management outlined aggressive goals for the next five years, including doubling its current broadband connections from 500,000 to 1 million and growing its broadband-enabled locations to 2.2 million by 2026 with approximately 60 percent of those locations being outfitted with fiber. The company had previously committed to reaching 929,000 service addresses with fiber “over the next several years” but this is the first time TDS has put a date to that goal. TDS management also said that they want to provide 1-Gig speeds to 80 percent of the company’s footprint by 2026.
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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