As the year’s legislative calendar winds down, a large new infrastructure spending program with dedicated funding for broadband appears dead. Attention is on smaller pieces of bi-partisan legislation addressing unwanted robocalls, narrowly targeted funding for “digital dead zones,” and mapping. Targeted infrastructure funding is partly addressed by a Senate appropriations bill that devotes $690 million in fiscal year (FY) 2020 funding for the United States Department of Agriculture (USDA) Rural Utilities Service (RUS) broadband loan and grant programs (presumably including the ReConnect program). Many rural interest groups have publicly called for continued funding for the program.
National Telecommunications and Information Administration (NTIA)
On October 2, NTIA released the pilot results of its National Broadband Availability Map (NBAM) which was authorized by Congress in 2018. Initially, the NBAM covers eight states: California, Utah, Minnesota, Tennessee, North Carolina, West Virginia, Massachusetts, and Maine. The NBAM incorporates FCC Form 477 data along with broadband data from third-party sources including other federal agencies. Because the NBAM includes public and proprietary data, coverage details are available only to state and federal “partners” and not the general public.
The November NTIA webinar is Building Digital Skills at the Local Level and will be held on Wednesday, November 20. Information from past webinars is available in the webinar archive. The BroadbandUSA Newsletter for September includes notable state news from Arkansas, Maine, North Carolina, Kentucky, and Kansas (among others).
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. Lastly, Acting NTIA Director Dianne Rinaldo spoke at the Schools, Health & Libraries Broadband Coalition annual conference in Arlington, Virginia, on October 18. Her remarks are available here.
USDA – Rural Utilities Service
A map showing all proposed and approved ReConnect projects is available here. Two grant approvals were recently announced: $2.86 million to a Tennessee electric Co-Op and $9.75 million to Orangeburg County, SC. We expect a slew of award announcements in the coming weeks. (On October 7, USDA announced $152 million in awards in its other (i.e., non-ReConnect) telecommunications loan/grant programs.)
Federal Communications Commission
The agenda for the Commission’s October 25 Open meeting is available here. 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.
Annual Broadband Deployment Notice of Inquiry
On October 23, the Commission issued its annual statutorily required inquiry into “whether advanced telecommunications [i.e., broadband] capability is being deployed to all Americans in a reasonable and timely fashion.” See Section 706(b) of the Telecommunications Act of 1996. Both Democratic Commissioners (Jessica Rosenworcel and Geoffrey Starks) dissented arguing the Commission is continuing a flawed methodology based on flawed Form 477 data. Comments are due November 22, 2019; replies are due December 9.
T-Mobile/Sprint Merger Approved
The Commission on October 16, 2019 voted 3-2 to approve the T‑Mobile/Sprint Merger, with both Democratic Commissioners voting against approval. Although the text of the final order has not yet been released, the Commission apparently agreed consumers would likely be harmed by the merger through higher prices, but that these negative effects would be mitigated or outweighed by benefits associated with increased service deployments including 5G. A recent state investigation uncovering major problems with Sprint’s compliance with the Lifeline program complicated but did not derail the FCC’s decision to approve the merger. Former Commissioner Clyburn, who became an advisor to T-Mobile, praised the final outcome which included the new T-Mobile signing a memorandum of understanding with the National Urban League and a coalition of civil rights groups committing to diversity in hiring, procurement, and philanthropic efforts to organizations serving disadvantaged and underrepresented communities.
$100 Million Connected Care Pilot Program
The Connected Care Pilot program’s Notice of Proposed Rulemaking (NPRM) remains pending. 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 filed August 29, 2019, with replies filed September 30.
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. If you are interested in following the “Digital Opportunity Data Collection” NPRM – which will be the basis of reforming the Form 477 process – an unofficial compilation of initial comments is are here; replies 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 with replies filed October 21.
USF Spending Cap NPRM and USF Contributions
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. (SHLB’s comments are here; Utah Education and Telehealth Network (UETN) comments are here.) Meanwhile, on September 12, the Commission announced the contribution factor – or the “tax rate” at which interstate telecommunications providers must pay into the universal service fund – for next quarter will reach 25% – a record high – with the increase driven largely by an eroding contribution base rather than programmatic spending.
On October 15, state members of the Federal-State Joint Board on Universal Service unilaterally issued recommendations for expanding the universal service fund (USF) contribution base. The state member reform recommendation supported expanding the contribution base to include Broadband Internet Access Service (BIAS). It also supported the establishment of a “firm budget” for each of the four USF programs to grow no faster than the Consumer Price Index.
Improving the Universal Service Administrative Company’s (USAC) E-rate Form 470 Drop Down Menu
The FCC’s Wireline Bureau is seeking comment on improving USAC’s Form 470 drop-down selections in USAC’s web-based application portal. Stakeholders have long asserted that ambiguous or confusing instructions on how to make these selections lead to unwarranted funding denials by USAC. Comments are due October 31, 2019; replies by November 15. At the same time, the FCC has issued guidance for USAC not to deny funding applications solely based on failure to select the correct drop-down option where the applicant has otherwise complied with competitive bidding rules.
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 here is whether the FCC should open a rulemaking to consider changes to program rules governing fiber construction. Recently, the Cochise County school superintendent targeted by a letter from Commissioner Michael O’Rielly responded. At a speech on October 2, O’Rielly again pressed his complaint regarding “duplicative” USF funding.
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. Commenters have been close to unanimous in supporting the Commission making Category 2 budgets permanent.
Rural Health Care Program
Rural Health Care 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 that, when the program cap is exceeded, will hit Healthcare Connect Fund (HCF) consortia particularly hard. Some of the new rules are scheduled to go into effect for the next Formal publication of the new rules occurred on October 11 with an effective date of November 12. November 12 is the deadline for petitions for reconsideration or clarification, more than one of which are likely.
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 reversed the FCC on blanket state preemption and remanded several issues including jurisdictional questions over pole attachment regulation and funding broadband through the Lifeline Program. Parties could still seek rehearing en banc at the DC Circuit or appeal to the Supreme Court; no one has yet said they intend to do this.
With the Court’s reversal on blanket preemption, the question now is what will happen to states that are or plan to regulate net neutrality? Parties on both sides have confirmed that the pending federal court cases in California and Vermont (see below) remain stayed until all judicial remedies are exhausted, including potential Supreme Court review. In addition, Washington State is actively enforcing its net neutrality rules against Internet providers in that state. Oregon has a law similar to Vermont’s that prohibits state procurements from Internet Service Providers (ISPs) that violate net neutrality principles. Executive orders on net neutrality exist in other jurisdictions.
One view is the feds can still knock these laws out, but it will have to proceed on a case-by-case basis. Others maintain that, because the Mozilla Court held that the FCC has abdicated its authority to regulate BIAS and all but eliminated potentially conflicting federal rules, state net neutrality efforts will survive. While the prospect of a patchwork of state rules should prompt Congress to act, action is highly unlikely until after the 2020 election.
- Mozilla Corporation, et al. v. FCC (DC Circuit Court of Appeals challenge to the 2017 Restoring Internet Freedom Order) – decided October 1, 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 a final resolution of Mozilla v. FCC.
- Vermont District Court. On October 18, 2018, the same industry groups – American Cable Association (ACA), The Wireless Association (CTIA), 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 final resolution of Mozilla v. FCC.
The National Conference of State Legislators (NCSL) features a summary of net neutrality efforts by state for 2019 here (updated October 1, 2019). Note this list does not identify current laws, only current efforts to pass new laws.