Thursday, September 17, 2020
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Universal Service Fund
Universal Service Fund
In 2017, the Federal Communications Commission’s Office of Inspector General (OIG) reported that FCC’s ability to deter and detect alleged Erate program fraud has been severely limited since the program’s inception due to a lack of certain controls. Also, as recently as February 2020, a number of E-rate program participants pled guilty to defrauding the program by billing for equipment and services that were not provided, and obtaining more than $2.6 million in program funds to which they were not entitled. GAO was asked to review fraud risk management in the E-rate program. This report addresses: (1) the E-rate program’s key fraud risks; (2) the extent to which FCC and USAC are managing fraud risks in accordance with leading practices; and (3) the extent to which FCC and USAC face challenges in effectively employing data analytics to support fraud risk management activities. GAO recommends:
- The Chairman of FCC should direct and coordinate with the Chief Executive Officer of the Universal Service Administrative Company (USAC) to comprehensively assess fraud risks to the E-rate program, including implementing their respective plans for developing periodic fraud risk assessments, examining the suitability of existing fraud controls, and compiling fraud risk profiles following the timelines described in this report. The assessments should be informed by the key fraud risks identified in this report from closed court cases, prior risk assessments, and OIG reports, among other sources. (Recommendation 1)
- The Chairman of FCC should ensure that FCC and USAC follow the leading practices in GAO’s Fraud Risk Framework when designing and implementing data-analytics activities to prevent and detect fraud as part of their respective antifraud strategies for the E-rate program. (Recommendation 2)
- The Chairman of FCC should direct the Chief Executive Officer of USAC to clearly define and fully document the data fields in all relevant E-rate program computer systems to help improve FCC’s ability to understand and use data to manage fraud risks. (Recommendation 3)
The Federal Communications Commission’s Wireline Competition Bureau opened a second funding year 2020 filing window to allow schools to request additional E-Rate funding specifically to address increased on-campus bandwidth needs. Schools across the United States continue to face unprecedented disruptions and challenges due to the COVID-19 pandemic. As the school year begins, many school districts are relying on remote learning, either in whole or in part, to educate students. This heightened reliance on remote learning, as well as social distancing in schools providing in-person instruction, has dramatically increased demand on school networks, creating an urgent need for additional on-campus bandwidth this school year. During this second filing window, schools will be able to purchase additional bandwidth for this academic year to address needs resulting from the increasing shift to 1:1 student-to-device ratios in classrooms, live streaming of classroom instruction to students at home, and expanding use of cloud-based educational tools and platforms—all of which can significantly increase on-campus bandwidth requirements. The second filing window will open upon publication of the Order in the Federal Register and close on October 16, 2020.
As Congress debates increases to the Lifeline benefit, it should also ensure that funds are directly appropriated to support any benefit increase or otherwise ensure that the Universal Service Fund funding mechanism is significantly reformed. Relying on decades-old funding approaches will only serve to undermine the goal of providing 21st-century broadband connectivity to Lifeline eligible households. We have argued that the Lifeline program needs to be reformed from its current provider-centric structure to one that instead puts the beneficiary at the center of a more digital approach, as modeled after the Department of Agriculture’s successful and evolving SNAP program. We must similarly reform the Lifeline funding mechanism. The current USF funding mechanism cannot accommodate the type of increased program expense that a $35/month benefit could drive. The financing becomes even more challenged if the benefit is increased to $50/monthly.
Using Federal Communications Commission and other public data sources, this report assesses recent trends in residential fixed broadband pricing between 2015 and 2020 in the United States. The key findings:
- The most popular tier of broadband service in 2015 (BPI-Consumer Choice) is now priced 20.2% lower and offers 15.7% faster speeds in 2020 on an average-subscriber-weighted basis.
- The highest speed offerings in 2015 (BPI-Speed) are now priced 37.7% lower and offer 27.7% faster speeds in 2020 on an averaged subscriber-weighted basis.
- Further, these price reductions run counter to inflation, which has increased consumer costs for overall goods and services by 9.3% over the same five-year period analyzed in this report. When inflation is considered, the real price of the most popular tier of broadband service has dropped by 28.1% since 2015; and the real price of the highest speed broadband service has dropped by 43.9%.
- This combination of declining prices and rising speeds delivers even greater value to consumers—as shown by a declining cost per megabit of connection speed (Mbps) of 37.9% for the most popular service and 56.1% for the highest speed service.
This data shows that broadband is becoming more affordable—thereby reducing, but certainly not eliminating, an obstacle to adoption. For instance, we know that 30% of K-12 students do not have access to high-speed internet and/or the devices needed to learn from home. More work, understanding, and concrete data is needed around the vital issue of affordability and this report seeks to contribute to that discourse.
Top House Democrats outlined aspirations to tackle broadband issues in 2021 under what they hope is President Joe Biden. “I promise you all we will restore net neutrality and make our broadband networks more competitive,” said Rep. Mike Doyle (D-PA), who chairs the House telecom subcommittee and envisions continuing to do so. If President Donald Trump wins re-election, the digital divide will widen, Chairman Doyle added. (The current GOP-led Federal Communications Commission and White House say the US is making headway on broadband deployment, and FCC Chair Ajit Pai noted massive broadband subsidies and airwave auctioning set to move in the final months of 2020.) And House Democratic Whip Jim Clyburn (D-SC) predicted broadband “will absolutely be a top priority next year,” saying that anything Congress does this year will be “insufficient” and “stopgap.” The lawmaker, who heads a broadband task force, also anticipates bipartisan support in these efforts. Broadband will be crucial to tackle the coronavirus and a prerequisite for proper contact tracing, he said.
Prior to the pandemic and resulting shift to distance learning, the St. Paul Public Schools district had already deployed a one-to-one iPad program, districtwide. District staff still had to troubleshoot internet access issues with families — and efforts have been made to help deliver hotspots and devices to students who may be doubled up with other families in neighboring communities.
When schools shut down and all learning got pushed to a virtual format in March, Charlotte Kinzley, manager of the Minneapolis district's homeless/highly mobile student services, says her team identified about 1,600 students — out of about 1,900 — without access to a computer or internet. Heading into the 2020-2021 school year, she and her team have been taking a pretty individualized approach, connecting with families to see how they can help remove barriers to distance learning. Sometimes that means sending a staff member out to a family, so they can borrow a cellphone, or arranging a cab so a parent can access registration or another school service. Beyond that, it’s more so a matter of getting word out about the various resources available to families — things like free school meal delivery for those unable to coordinate a curb-side pickup, and access to rental assistance through the Stable Homes, Stable Schools initiative, a partnership between the city, the district and other local entities.
Verizon has recently completed lab trials with Corning and begun lab trials with Samsung on new 5G mmWave in-building solutions which, when commercially launched, will provide 5G mmWave coverage inside facilities such as hospitals, manufacturing facilities, warehouses, schools, ports, retail stores and more. The launch of these indoor cell sites will not only extend the footprint of Verizon’s 5G Ultra Wideband network, but will also bring the promise of private networks with Mobile Edge Compute (MEC) capabilities one step closer. “An indoor cell site brings the benefits of mmWave 5G - high throughput, great capacity, high reliability and the ability for a large number of users to simultaneously use robust data applications - indoors where it may be more difficult for signals from our outside 5G network to penetrate,” said Adam Koeppe, Senior Vice President of Technology Planning and Development at Verizon. The impending commercialization of these indoor systems are a critical step on the way to private 5G networks.
We have sustained experience and responsibilities like few other companies during the coronavirus pandemic. You don’t design a network for a pandemic per se. But it turns out that investing more than $135 billion over the past 5 years1 to build a robust network with self-healing architectures and open standards can help ready it for just about anything. Today, we’re continuing to see high demand for more connectivity-based services and our network is performing well. We’re carrying more data than ever before. In fact, the AT&T Global Network carries more than 391.8 petabytes of data traffic on an average day. That’s up nearly 20% compared to pre-pandemic figures. And we expect continued growth with the (virtual) school year in full swing and proliferated telework environments across the country. We’re seeing more than just a big jump in data consumption too. As work and school locations have switched from the office and classroom setting to the kitchen table, our voice and wireline network traffic has increased while our mobility data traffic is now more distributed:
- Text – Customers have set a record for text messages during the pandemic 2 times. During the March spring break timeframe and on Easter weekend, people sent more than 23,000 texts/second across the AT&T Network. The previous peak (pre-pandemic) was 15,000 texts/second.
- Voice – Wireless voice usage has soared, with a nearly 40% increase, as people began to work from home and use their mobile devices to attend meetings and connect with colleagues.
- Data – Mobile data volume has slightly decreased during COVID-19 since people are able to connect to their home Wi-Fi throughout the day.
When it came to naming the company's top-priorities, AT&T CEO John Stankey said adding more fiber topped the list. AT&T's second key priority is making sure that it has broadband connectivity on 5G, which means even more fiber. Stankey said anything AT&T could do to put more fiber out into the network was a top priority because fiber fuels both the consumer and business segments. "When you have a great 5G network, you're deploying a lot of fiber, and that's something that we think are married well," Stankey said. "And we think we're in a very unique position because the fiber that we deploy not only powers our wireless business, but it helps our consumer business and fixed broadband. It helps our enterprise customers and how we deal with them as well, and so we strategically want to make sure we're doing that."
Comcast is poised to deliver a record quarter of broadband subscriber gains as the media giant slowly pulls out of the economic trench caused by the pandemic. Brian Roberts, chairman-CEO of Comcast, said the cable giant is preparing to report net broadband adds for the third quarter of more than 500,000, a record for the company. Roberts emphasized the importance of the company’s position as one of the world’s biggest broadband providers, calling high-speed internet service “the heart and soul of the company.” “Broadband in general is a fantastic business for us and will have great growth in the years ahead,” Roberts said. For the year, Comcast is on track to “greatly exceed” 2019’s benchmark of 1.4 million net broadband adds.
President Donald Trump announced his intent to nominate Nathan A. Simington, of Virginia, to be a Member of the Federal Communications Commission.
Nathan A. Simington is currently a Senior Advisor in the National Telecommunications and Information Administration (NTIA) specializing in network and telecommunications policy. Among his many responsibilities across the telecommunications industry, he works on 5G security and secure supply chains, the American Broadband Initiative, and is NTIA’s representative to the Government Advisory Committee of the Internet Corporation for Assigned Names and Numbers.
Prior to his appointment at NTIA, Simington was Senior Counsel to Brightstar Corporation, a leading international company in the wireless industry. In this role, he negotiated deals with companies across the spectrum of the telecommunications and internet industry, including most of the world’s leading wireless carriers. As the head lawyer on the advanced mobility products team, he spearheaded numerous international transactions in the devices, towers and services fields and forged strong relationships with leading telecom equipment manufacturers. Prior to his career with Brightstar, Simington was an attorney in private practice with prominent national and international law firms. Simington was also a Presser Fellow in Bucharest in 2005. He earned his J.D. from the University of Michigan Law School, two Masters Degrees from the University of Rochester, and his Bachelor’s Degree from Lawrence University. Originally from Saskatoon, Canada, he became an American citizen in 2017. He currently lives with his wife and three children in McLean, Virginia.
President Donald Trump announced the nomination of Nathan Simington, who is currently a senior advisor in the National Telecommunications and Information Administration, to replace Michel O'Rielly on the Federal Communications Commission. Commissioner O'Rielly apparently angered President Trump by saying that the FCC must uphold First Amendment speech protections "that apply to corporate entities, especially when they engage in editorial decision making." O'Rielly's comments signaled that he isn't likely to support the Trump administration petition, submitted by the NTIA, that asks the FCC to reinterpret Section 230 of the Communications Decency Act in order to limit social media platforms' legal protections for hosting third-party content when the platforms take down or alter content they consider objectionable. Simington had a handing in drafting President Trumps' May Sec 230 order. President Trump had nominated O'Rielly to another five-year FCC term in March, but withdrew the re-nomination after O'Rielly's comments. Simington's nomination needs approval from the Senate. Commissioner O'Rielly could serve on the FCC through the end of 2020 if the Senate doesn't act on the nomination before then, but he would have to leave if Simington officially gets the job. O'Rielly's FCC term technically expired in June 2019.
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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