As the year’s legislative calendar winds down, a large new infrastructure spending program with dedicated funding for broadband appears dead. Attention now is on smaller but important pieces of bi-partisan broadband legislation such as the Secure and Trusted Communications Act, introduced in the House of Representatives on September 24. The bill would prohibit the use of federal funds to purchase communications equipment or services that pose a national security risk, and appropriates $1 billion for the Federal Communications Commission (“FCC” or the “Commission”) to establish a $1 billion “Secure and Trusted Communications Reimbursement Program” to assist small communications providers in removing and replacing compromised equipment (so-called “rip and replace”). Broadband mapping also continues to be a focus with a number of bills circulating in both the House and Senate.
Congress has reportedly authorized $550 million in the United States Department of Agriculture (USDA) ReConnect funding in 2019 (as compared to $600 million in 2018). Meanwhile, the Fiber Broadband Association has released a study finding that half of all households will be passed by all-fiber networks by 2025 and that it will cost $52 billion to reach 80% and another $18 billion to reach 90% by 2029. The study is available here (registration required).
In September 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. A recording of the event is available for streaming at the link.
National Telecommunications and Information Administration (“NTIA”)
The October NTIA webinar is on “Broadband’s Role in Revitalizing Main Street” and will be held on Wednesday, October 16. The September webinar on “Measuring the Economic Impact of Broadband” was held on September 18, 2019, with speakers from Purdue and Oklahoma State; more information here. Information from past webinars is available in the webinar archive.
The BroadbandUSA Newsletter for September includes notable state news from Arkansas, Maine, North Carolina, and Wisconsin (among others). Of particular note from the August newsletter (available here) is a link to a recent report by the Federal Reserve Bank of Kansas City on the digital divide. On that note, the Federal Reserve Bank of Richmond is hosting a workshop entitled “Investing in Rural America” on October 2, 2019, in Harrisonburg, VA, with a morning session on solving the last mile broadband problem featuring a distinguished panel including Karen Hanson, from NTIA, and Harold Feld from Public Knowledge.
NTIA now hosts a searchable database featuring 50 federal broadband funding opportunities across a dozen federal agencies. The NTIA Broadband USA main page (scroll down) features a state-by-state summary of state broadband programs.
USDA – Rural Utilities Service
A map showing all proposed and approved ReConnect projects is available here. We are expecting a new ReConnect funding opportunity announcement later this year with funding expected to be comparable to last year’s $600 million. USDA will have a day-long workshop on the ReConnect program in Casper, WY on October 10, 2019 (registration link). The workshop will provide an overview of the ReConnect application process.
In April, USDA issued a report on rural broadband infrastructure focused on next-generation precision agriculture. Meanwhile, the FCC announced the formation of a federal advisory committee on precision agriculture.
The agenda for the Commission’s October 25 Open meeting has not yet been posted. The September 26 FCC Open meeting included an order allocating $950 million to rebuild and harden communications infrastructure in Puerto Rico and the U.S. Virgin Islands, items on the upcoming 3.5 GHz auction and access fee arbitrage, and several broadcast-related items. The meeting video and links to all items considered are available here.
T-Mobile/Sprint Merger Approval
On August 14, 2019, Chairman Ajit Pai announced the circulation of a draft order approving the T‑Mobile/Sprint Merger. Meanwhile, an investigation by the Oregon Public Utility Commission has uncovered problems with Sprint’s compliance with the Lifeline program, leading the FCC to announce (on September 24) that 885,000 of Sprint’s Lifeline customers – 30% of its Lifeline subscriber base – were apparently violating the “non-usage” rule (requiring lines to show service usage at least once per month). Whether this will impact the Commission’s merger decision is unclear.
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 July 29 and replies August 26 (unofficial compilation of principal comments here, replies here). Most recently, 30 Democratic Senators led by Sen. Ed Markey (D-MA) have sent a letter to Chairman Ajit Pai opposing the cap. Meanwhile, on September 12, the Commission announced the contribution factor for next quarter will reach 25% – a record high – with the increase driven increasingly by an eroding contribution base rather than programmatic spending.
$100 Million Connected Care Pilot Program
The Connected Care Pilot program continues to move forward at the FCC with the 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. Initial comments on the NPRM were due August 29, 2019, with replies due September 30. An unofficial compilation of initial comments are available here.
Broadband Deployment and Mapping
USTelecom and major industry groups have 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
The Commission in August 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 (CAF)) over a ten-year period to deliver a minimum of 25/3 Mbps broadband service to 4 million rural homes and businesses. Priority would be given to faster speeds. Phase I of the RDOF would allocate $16 billion for “wholly unserved” census blocks through a multi-round auction. Phase II would allocate the balance to partially unserved census blocks and wholly unserved areas not awarded in Phase 1. The $20.4 billion in RDOF funding is coming out of current High-Cost support mechanisms such as unused or termed-out CAF funding and the never-deployed Remote Areas Fund – with the money targeted to eligible telecommunications carriers (ETCs). The RDOF NPRM is available here. Initial comments were filed September 20 and an unofficial compilation is available here; replies are due 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. At stake is whether the FCC should open a rulemaking to consider changes to program rules governing fiber construction. Dueling filings by interested parties continue, most notably from the Cochise County, New Mexico, school superintendent responding to an accusatory letter from Commissioner Michael O’Rielly.
Category 2 Budgets
On July 17, the NPRM proposing to make Category 2 (Cat2) 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 Cat2 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. The NPRM also requests comments on further ways to improve E-rate administrative burdens. Note some commenters are requesting the Commission increase the per-student budget for Cat2 to $250 from the current $159. Some commenters also support adding cybersecurity as an eligible Cat2 service. (Cox Communications and Aruba have made similar requests in recent comments to the FCC’s annual Eligible Services List.)
Rural Health Care Program
2019 Funding Demand
The Universal Service Administration Company (USAC) has not yet published gross funding demand information (the gross number of funding applications) even though this information is known in July after the annual application window closes. Failure to release this information fuels speculation that demand again exceeds the potentially available funding of $677 million ($594 million plus $83 million in rolled-over unused funding unused in prior years).
Rural Health Care (RHC) Reform Order
The Commission on August 20 released a comprehensive Report and Order in the Rural Health Care program that reflects the most thorough reform and restatement of the RHC program since its inception in 1997. While many of the new rules were expected and reflect needed improvements, the Commission made fundamental and controversial changes to the RHC Telecom Program and instituted a new funding prioritization system. Some of the new rules are scheduled to go into effect for the next funding year (FY 2020), while others will wait until FY 2021. The next procedural step is a formal publication of the new rules in the Federal Register with that publication date starting the clock on petitions for reconsideration or clarification, or judicial appeals – all of which are possible.
On October 1, the DC Circuit upheld in significant part the FCC’s 2017 repeal of net neutrality rules, as well as the so-called transparency rule which requires carriers to disclose changes in their terms of service. The decision in Mozilla vs. FCC was not a complete win for the FCC however, as the Court remanded several minor issues to the FCC and reversed the FCC on blanket preemption of state net neutrality rules.
- 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.
- 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.
In California, a dispute has erupted about whether the state Public Utilities Commission (PUC) has the authority to study the affordability of broadband services in the state. Cable and telecom providers are arguing the PUC has no jurisdiction because broadband is an “information service” and not a public utility. This debate is an obvious byproduct of the FCC’s 2017 Restoring Internet Freedom decision.
The National Conference of State Legislators (NCSL) features a state by state summary of net neutrality efforts for 2019 here (still not updated since May 6, 2019).