In my years working on communications policy, I have been tremendously focused on improving the effectiveness of our Universal Service Fund programs to bring broadband Internet to those without access. Part and parcel of that mission is to ensure the USF’s sustainability for years to come, and to protect the hard-earned investments of consumers who pay for our subsidy programs. I have advocated on behalf of ratepayers to address a perennial problem of public choice: while there’s never any shortage of special interest groups seeking additional spending, those who actually foot the bill are much less likely to spend time and resources to defend their own interests. Quite reasonably and appropriately, they’re focused instead on their everyday, busy lives. That is why I called on the FCC to begin this critical rulemaking. The FCC has time and again increased spending in each of the discrete sub-programs, often justifiably so. However, it has done so without the constraints of a topline budget, and, in turn, without considering the effect of spending decisions for the whole USF enterprise and how to fairly and efficiently allocate scarce funds among the four programs. That is not a responsible way to run an $11 billion-plus fund, and not the way the vast majority of federal government programs—or American businesses and families, for that matter—operate. 

It seems necessary to set the record straight on several misconceptions that were peddled in the wake of the draft’s circulation:

1. FACT: This NPRM initiates a dialogue and does NOT constitute a final order.
2. FACT: This NPRM’s proposed budget would NOT cut funding to Universal Service.
3. FACT: This NPRM is NOT a backdoor way to establish a budget on Lifeline.

The FCC’s Universal Service programs are among the most significant “tools in the toolkit” possessed by the federal government to ensure that all Americans have access to voice and broadband services comparable to their fellow citizens. Considering both the success of [USF] programs and the FCC’s statutory mandate from Congress, a cap on the Universal Service program’s overall budget is not the right approach. The proposal would pit deserving beneficiaries—anchor institutions, students, patients, and Americans who lack broadband—against one another in a fight for Universal Service funds. This would be a terrible result. It would threaten connectivity for the nation’s students. It would restrict the ability of the Rural Health Care program to enable rural clinics to deliver services in areas that have no other options for patients to get health care services in their communities. It would impinge on the reach of the FCC’s Lifeline program, the only Federal program designed to address the affordability of communications services for low-income consumers. And, it would curtail the FCC’s ability to address the problem of internet inequality.

In particular, the NPRM proposes to combine the E-Rate and the Rural Health Care programs under one cap. That raises an alarm for me, and would have the effect of immediately lowering one program’s budget if the other is oversubscribed.3 I believe that kind of a budget cut runs counter to the FCC’s statutory obligations. Furthermore, the cap is arbitrary because it has no relation to the actual nature of the internet inequality problem in this country. How can we cap the amount of money needed to support broadband when we don’t even know the number and locations of the Americans that still need to be connected? As I have outlined in another statement, the FCC’s data troubles raise serious questions about whether the agency understands the problem it seeks to solve. Instead of imposing an arbitrary cap, the FCC should be improving its data collection and analysis capabilities so it can understand the true nature of the problem and measure its progress. In short, the FCC should be focused on mapping not capping.

In early May, various Members of Congress wrote to Federal Communications Commission Chairman Ajit Pai to inquire about efforts to improve the accuracy of the FCC's Form 477 collection of voice and broadband subscription and deployment data. The lawmakers sought to have validated data and more accurate broadband maps. On May 23, Chairman Pai responded to these letters, describing how the FCC initiated two basic reforms to the collection of broadband data when he came into office: 1) Initiating a new data collection for mobile broadband coverage as part of Phase II of the Mobility Fund, and; 2) a top-to-bottom review of the Form 477 process to ensure that broadband data was more accurate, granular, and useful to the FCC and the public. He also said the FCC is interested in developing methods for the submission of reliable, consumer-driven data to better inform FCC decision making. 

There are several serious problems with the Federal Communications Commission's 2019 Broadband Deployment Report, but here’s the one we’re most concerned about: The FCC majority has chosen, once again, to ignore the critical issues of broadband cost and affordability in its analysis of “whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion.” The cost of broadband Internet service, and households’ ability to pay that cost, are important determinants of broadband access. The physical presence of fast broadband infrastructure in a community is only valuable to the extent that community residents, institutions, and businesses can afford to subscribe to it. For NDIA, this failure to acknowledge the very real link between broadband access and broadband affordability puts the 2019 Broadband Deployment Report, in Commissioner Starks’ words, fundamentally at odds with reality.

Delaware offcials and wireless network company Bloosurf have signed a deal expand broadband access in the state. The Delaware Department of Technology and Information (DTI) estimates about 127,000 homes and businesses will benefit from the three-stage project. The state will pay $2 million to add routers at 14 Internet towers and for new fiber-optic lines in Kent and Sussex counties. Delaware will have ownership of the routers for seven years, according to the deal. Once installation is completed sometime in 2021, residents can expect minimum speeds of 15 megabits per second. 

The Department of Justice reportedly talked to representatives from Comcast and Charter recently about filling the void of the fourth major US wireless carrier that would be created if T-Mobile and Sprint are allowed to merge. Apparently, as a condition for approving T-Mobile’s $26.5 billion acquisition bid for Sprint, the DOJ wants the Number 3 & 4 wireless companies to divest wireless spectrum and enable a fourth US major wireless carrier. For their part, Comcast and Charter both have nascent mobile services through mobile virtual network operator (MVNO) agreements with Verizon. And the cable companies collaborate on wireless business planning and technology. As of the end of the first quarter, Comcast reported 1.4 million wireless lines in deployment while Charter said it had around 310,000. Analysts, however, suspect that after paying network leasing bills to Verizon, neither operator makes money on their respective mobile service. Apparently, the companies are interested in acquiring spectrum to possibly create—perhaps jointly—their own wireless network. The companies are also interested in discussing more favorable MVNO deal, as well as any network equipment or customers that might be divested by T-Mobile and Sprint in order to facilitate approval. 

Google and Amazon have thrived as American regulators largely kept their distance. That may be changing. Politicians on the right and left are decrying the tech companies’ enormous power. President Donald Trump (R-NY) and other Republicans have taken swipes at Amazon over taxes and at Google over search results they say are biased. Democrats have focused on whether the companies stifle competition. And now, the two federal agencies that handle antitrust matters have split up oversight of the two companies, with the Justice Department taking Google and the Federal Trade Commission taking Amazon. The decisions do not mean that the agencies have opened official federal investigations, but by staking claims over the two tech giants, the agencies are signaling the potential for greater scrutiny.