Friday, March 19, 2021
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FCC Asks, "How Can $7 Billion Close the Homework Gap?"
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Former AT&T Lawyer says company systemically overcharged neediest schools, ignored E-Rate rules
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To help schools and libraries provide devices and internet connectivity to students, school staff, and library patrons during the pandemic, Congress established a $7.171 billion Emergency Connectivity Fund as part of the recently enacted American Rescue Plan Act of 2021. Now the Federal Communications Commission must craft rules to distribute the new funds to eligible schools and libraries for the purchase of eligible equipment and advanced telecommunications and information services for use by students, school staff, and library patrons at locations other than a school or library. And the FCC is asking for public input so the new effort efficiently delivers broadband—primarily to homes.

I want to start by recognizing that the cybersecurity challenge is about to get even more challenging with the advent of 5G. I’m going to share three lessons we’ve all learned from scary movies that should apply equally to our nation’s cybersecurity.
- Never Split Up. In my first meeting as Acting Chairwoman I committed to working with our federal partners and the private sector to increase the security and resiliency of our nation’s communications networks. I also made clear my belief that working with like-minded countries and multilateral institutions and building on shared frameworks like the Prague Principles can multiply our strength across the globe.
- Don’t Answer the Door; Don’t Let the Threat Inside Your Home. We’ve rolled out policies aimed at slowing down the adoption of Huawei and ZTE equipment globally, targeting these companies’ practices that allow them to move quickly, and leveling the international playing field.
- Have a Back-Up Plan. While we continue to take action to slow down untrusted vendors, we also must take action to speed up American innovation. So to get that effort started, March 17 the FCC launched the first-ever inquiry into open radio access networks—or open RAN.

I am very pleased to learn that Senator Cantwell and Acting Chairwoman Rosenworcel had a phone call in which they reached an understanding that maps will get done in just four months. This is an important development because completing these maps is key to unlocking the funding needed to further close the digital divide. It’s great to learn about the new July 2021 timeline.
North Carolina’s Broadband Infrastructure Office released its Digital Inclusion Plan Template and Guide to help local governments create plans for closing the state's digital divide. The guide is a reference for municipalities to design their own plans for managing their tech and infrastructural needs and assets. So far 14 communities throughout the state have used the template to formulate initiatives to “level the playing field” for families who don't have the broadband access and devices necessary for remote work and schooling.
Universal Service Fund
Former AT&T lawyer says company systemically overcharged neediest schools, ignored E-Rate rules

Theodore Marcus once was an in-house lawyer for AT&T, tasked with reviewing whether the company was overcharging schools and libraries for Internet and telephone service. Marcus came to believe that AT&T did not charge low prices required by law, misled the government about its compliance with the rules of a federal program (E-Rate), and then rebuffed his concerns. A few months before he left AT&T, Marcus handed what he thought was damning information to a lawyer suing the company, with the expectation that he might share in the payout if the suit was victorious. As a result, AT&T is now accusing Marcus of “shocking” legal misconduct and is trying to persuade a federal judge to dismiss a sweeping lawsuit because of it. The future of the case will depend, in part, on whether a federal court views Marcus as a whistleblower trying to right a wrong, or a corporate lawyer violating his duty to his former employer.
If the pattern of overcharging that Marcus and others have alleged is true, the telecom company deprived hundreds of school districts nationwide of millions of dollars they could have used for education expenses. Limited money in the E-Rate fund at that time could have funded service to more communities. “There’s been no consequences for a bunch of folks…who failed to do what they were supposed to do for a program that’s supposed to take care of poor children,” Marcus said. "That’s what’s driving me. These are poor Black and Brown kids and they cannot fend for themselves and you have to do what’s right. There has to be an accounting.”

Cable operators, bracing for a slowdown after the robust broadband growth during the height of the pandemic may be in for a surprise. Federal money from the American Rescue Plan could help maintain, and in some cases spur, high-speed data additions in both urban and rural markets, according to MoffettNathanson principal and senior analyst Craig Moffett. Cable operators added more than 4 million broadband customers in 2020, the sector’s biggest growth spurt in a decade and one that occurred as penetration levels were in the 80% range. Operators across the board have warned analysts and investors to not expect the same growth rates in 2021 and, for the most part, they have complied, lowering forecasts over the next few years. But that pullback may be a bit premature given the scope and size of the federal stimulus bill, which has earmarked billions of dollars to make broadband service both more available and more affordable across the country. Taking those factors into account, Moffett ticked up his own subscriber growth estimates for the top publicly traded cable operators by nearly 5% over the next four years. Three programs that are part of the $1.9 trillion federal stimulus plan -- the Emergency Broadband Benefit Program, the Emergency Connectivity Fund and the Coronavirus Capital Projects Fund -- will provide a combined $20 billion in funding for broadband projects. But more importantly, a significant part of those funds will be targeted at affordability as well as availability.

Britain’s telecommunications regulator, Ofcom, has paved the way for a massive investment in full-fibre broadband networks by the industry in a move that is also likely to result in higher prices to fund the upgrade. BT will more than quadruple the size of its full-fibre network to 20 million homes by the end of the decade after Ofcom unveiled a long-term plan designed to stimulate a rapid upgrade to the nation’s broadband infrastructure. Openreach -- BT’s network that is used by companies including Sky, Vodafone and TalkTalk to offer consumer broadband -- will now accelerate the speed of its network upgrade having been unshackled from price controls. The shake-up represents a shift from the previous regulatory regime whereby Openreach was heavily regulated, but Ofcom stopped short of setting a rate-of-return range for BT.
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 Robbie McBeath (rmcbeath AT benton DOT org) — we welcome your comments.
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