House Democrats’ “Leading Infrastructure for Tomorrow’s America Act” (LIFT America Act) –containing $40 billion dedicated for broadband, largely through reverse auctions – remains pending. While prospects for significant federal spending on a new broadband program remain in limbo, Congress has allocated further funding to the United States Department of Agriculture (“USDA”) ReConnect funding for 2020 (item below). Bi-partisan interest in broadband generally remains strong. On Thursday, September 5, Senator John Thune (R-SD) (chairman of the Subcommittee on Communications, Technology, Innovation, and the Internet) held a field hearing on rural broadband at the Southeast Technical Institute, in Sioux Falls, SD. The witness list and testimonies are available here.
National Telecommunications and Information Administration (“NTIA”)
The September NTIA webinar is on “Measuring the Economic Impact of Broadband” and will be held on September 18, 2019, with speakers from Purdue and Oklahoma State University. More information here. The next NTIA/state broadband workshop that is open for registration will be in Reno, NV, September 27, 2019. Details here. The BroadbandUSA Newsletter for September is available here. Note the August newsletter (available here) included a link to a recent report by the Federal Reserve Bank of Kansas City on the digital divide. Among other things, it addresses how the Community Reinvestment Act (CRA) supports local broadband investment including through grant opportunities.
USDA – Rural Utilities Service
USDA will have day-long workshops on the ReConnect program in Fort Wayne, IN (at Ivy Tech Community College) on September 19, 2019 (registration link), and in Columbia, SC (at Clemson University Sandhill Research and Education Center) on September 26, 2019 (registration link). The workshops will provide an overview of the Re-Connect application process. We are expecting a ReConnect funding opportunity announcement later this year with 2020 funding at a comparable level to 2019 ($600 million).
Federal Communications Commission (“FCC” or the “Commission”)
The agenda for the Commission’s next monthly open meeting on September 26 is available here. Meanwhile:
T-Mobile/Sprint Merger Approval on Circulation
On August 14, 2019, FCC Chairman Ajit Pai announced circulation of a draft order approving the T‑Mobile/Sprint Merger. The primary rationale is to advance 5G deployment with competition being protected (in part) by DISH Network’s planned acquisition of Boost Mobile.
FCC Streamlined 5G Deployment Defeat at the DC Circuit
One of the outcomes of the FCC’s Broadband Deployment Advisory Committee (BDAC) process was a decision by the FCC to preempt certain types of local decisions in order to streamline 5G deployment. Tribal groups sued and, in early August, the Court reversed the FCC in part, finding “the Commission failed to justify its confidence that small cell deployments pose little to no cognizable religious, cultural, or environmental risk, particularly given the vast number of proposed deployments and the reality that the Order will principally affect small cells that require new construction.” The Court, however, upheld some elements of the FCC order. FCC Commissioner Brendan Carr explained: “Most importantly, the court affirmed our decision that parties cannot demand upfront fees before reviewing any cell sites, large or small. These fees, which had grown exponentially in the last few years, created incentives for frivolous reviews unrelated to any potential impact on historic sites. Those financial incentives are gone, and we expect our fee restrictions to continue greatly diminishing unnecessary and costly delays.”
Universal Service Fund (USF) Spending Cap Notice of Proposed Rulemaking (NPRM)
The USF spending cap NPRM proposes an overall spending cap to all four universal service programs in the aggregate, in addition to any program-specific caps or budgets that currently exist. Initial comments were filed on July 29 and replies were filed on August 26 (unofficial compilation of principal comments here, replies here; courtesy NECA Washington Watch). Many commenters opposed an overall cap, arguing it was unnecessary due to the fact that each separate program already has either a budget or a cap, and that an overall cap would only add complexity to already complex cap mechanics. Chairman Pai has noted that the proposed cap will be over $3 billion greater than the existing total disbursements for the programs.
$100 Million Connected Care Pilot Program
The Connected Care Pilot program continues to move forward at the FCC with the recent release of the notice of proposed rulemaking. The proposed pilot would award an unspecified number of projects across the country funding to defray the broadband costs associated with providing “connected care” to low-income Americans and veterans. Connected care is generally remote patient monitoring and telehealth services that provide care for chronic health conditions to patients in their homes. Connected care is increasingly being deployed to address diabetes management, opioid dependency, high-risk pregnancies, pediatric heart disease, mental health conditions, and cancer. This pilot could move forward as early as spring 2020. Initial comments on the NPRM were due August 29, 2019, with replies due September 30. An unofficial compilation of initial comments are available here (courtesy NECA Washington Watch).
Broadband Deployment and Mapping
USTelecom has filed a summary of their pilot efforts (in Virginia and Missouri) to establish new mapping protocols. The pilot showed that as many as 38% of additional rural locations in Virginia and Missouri are unserved by participating providers in census blocks that would have been reported as served in today’s FCC Form 477 reporting approach. Filings in the FCC’s newly established mapping docket (Establishing the Digital Opportunity Data Collection, WC Docket No. 19-195) are available here.
Rural Digital Opportunity Fund
At the August 1 meeting, the Commission approved an NPRM for a proposed $20.4 billion Rural Digital Opportunity Fund (RDOF). The new fund would use reverse auctions to allocate a portion of High Cost program universal service funding (i.e., the Connect America Fund) over a ten-year period to deliver a minimum of 25/3 Mbps broadband service to 4 million rural homes and businesses. The $20.4 billion in RDOF funding is coming out of current High Cost support mechanisms such as unused or termed-out Connect America Fund (CAF) funding and the never-deployed Remote Areas Fund (RAF) – with the money targeted to eligible telecommunications carriers (ETCs). The RDOF draft NPRM is available here; comments are due September 20; replies October 21.
Texas Carriers’ E-rate Rulemaking Petition on Overbuilding
On May 30 the FCC sought comment on a petition for rulemaking in the E-rate program filed by several small Texas telcos that claimed E-rate rules are supporting improper overbuilding of their networks. Comments were filed on July 1 with replies filed on July 16 (links direct to an unofficial list maintained by NECA Washington Watch). Dueling filings in the docket continue. Notably, FCC Commissioner Michael O’Rielly sent a letter on August 26 to the school superintendent in Cochise County Schools in Bisbee, AZ, requesting information about its procurement process for a recent E-rate funding request.
Category 2 Budgets
On July 17, the NPRM proposing to make Category 2 budgets a permanent feature of the E-rate program was published in the Federal Register (establishing comment deadlines of August 16 and September 3). This NPRM was expected after the Wireline Bureau issued its report earlier this year finding that the Category 2 budget approach was working well. The 2014 E-rate Modernization Order had adopted a five-year interim approach for the budget approach – with that five-year period over this year. Given the favorable Bureau report and commenters overwhelmingly supporting Category 2 budgeting, we expect the Commission to continue the approach.
GAO Report on Supporting “Off-School Premises Access” through E-rate
On July 29, 2019, the Government Accountability Office (GAO) released a report entitled FCC Should Assess Making Off-School Premises Access Eligible for Additional Federal Support. The GAO found that rules for the FCC’s E-rate program rules may limit schools’ ability to provide wireless access off-premises and that schools that provide such access using services supported by E-rate must reduce their E-rate discounts.
Rural Health Care (RHC) Program
The Commission on August 1 voted to approve a Report and Order in the Rural Health Care program that implements substantial changes to that program. This Report and Order represents the most thorough reform and restatement of the RHC program since its inception in 1997. The most significant overall change to the program is a prioritization system for when program demand exceeds the cap (replacing the system of across-the-board pro rata reductions). There will now be eight priority tiers, four based on whether an area is urban or one of three classifications of rural, and then on whether that area is classified as a Medically Underserved Area/Population (MUA/P) by the Health Resources and Services Administration (HRSA). In addition to this new priority system, in any year that the program exceeds the cap, Healthcare Connect Fund consortium applicants would have their maximum percentage of allowable urban sites reduced in 5% steps. These changes will all be effective beginning funding year (FY) 2020 (July 1, 2020 through June 30, 2021). With respect to the Telecom Program, the Commission fundamentally changed how “rural” and equivalent “urban” rates are established. Among other things, the Commission has delegated responsibility to Universal Service Administrative Company (USAC) to survey and compile urban and rural rates to be used by healthcare providers and service providers in the Telecom Program. In a last-minute change from the draft, for Alaska only, the Commission agreed to create a Frontier Rural category consisting of those areas of the Extremely Rural tier that are classified by the state of Alaska as off-road. There are also numerous changes to the competitive bidding rules, new invoicing deadlines, and rules for when services must be delivered by.
No substantive updates on Net Neutrality this month – except to say the DC Circuit decision on Mozilla vs. FCC could come any day (or months from now).
- Mozilla Corporation, et al. v. FCC (DC Circuit Court of Appeals challenge to the 2017 Restoring Internet Freedom Order) – Final briefs have been filed and oral arguments occurred in early February 2019. Here is a link to the Amicus Brief filed in August 2018 by the American Council on Education and 19 other education and library associations in support of those challenging the FCC repeal.
- Eastern District of California. On October 3, 2018, SB 822, the California Internet Consumer Protection and Net Neutrality Act of 2018 was challenged in federal district court in California by the Department of Justice (DOJ) and several industry groups (in a separate suit). DOJ sought a preliminary injunction but on October 26, 2018, the court agreed to a request by all parties to stay the case after California agreed not to enforce the law pending outcome at the DC Circuit decision on the FCC’s “Restoring Internet Freedom” order (Mozilla v. FCC).
- Vermont District Court. On October 18, 2018, the same industry groups – American Cable Association (ACA), CTIA – The Wireless Association (CTIA), NCTA – The Internet & Television Association (NCTA), and USTelecom challenged Vermont’s net neutrality law and executive order in federal district court there and in January 2019 sought summary judgment. The parties in March 2019 agreed to stay further proceedings pending a decision in Mozilla v. FCC.
The National Conference of State Legislators (NCSL) features a summary of net neutrality efforts by states for 2019 here (not updated since May 6, 2019).
If you have any questions or concerns regarding these updates, do not hesitate to contact your counsel.