FCC Launches National Broadband Plan; Includes Focus on Affordability

To a mixture of fanfare, relief, and criticism, the FCC delivered to Congress Connecting America: The National Broadband Plan on March 16th. Weighing in at 376 pages, including appendices, it is both the culmination of several years work and the beginning of a lengthy process which, the report states, “[l]ike the Internet itself. . . will always be changing – adjusting to new developments in technologies and markets, reflecting new realities, and evolving to realize the unforeseen opportunities of a particular time.” While many may argue that a national plan to promote broadband deployment is years overdue, and others may claim that the sheer size of the endeavor – which includes many steps for Congress to take – will mean that some of it will never be implemented, it is nonetheless a momentous occasion. If fully realized, all Americans, including low income New York families, which be able to afford 100 megabits per second (“mbps”) Internet access.

Background
The FCC was directed by Congress in early 2009 through the American Recovery and Reinvestment Act (“ARRA“) to develop a National Broadband Plan to ensure every American has access to broadband capability. Congress required that the plan include “a detailed strategy for achieving affordability and maximizing use of broadband to advance `consumer welfare, civic participation, public safety and homeland security, community development, health care delivery, energy independence and efficiency, education, employee training, private sector investment, entrepreneurial activity, job creation and economic growth, and other national purposes.'”

In other words, Congress should not be surprised with the depth and breadth of the Plan.

Plan Goals
In Connecting America, the FCC establishes four broad, short term goals . . . .

1. Design policies to ensure robust competition and, as a result, maximize consumer welfare, innovation, and investment;
2. Ensure efficient allocation and management of assets the government controls or influences, such as spectrum, poles, and rights-of-way, to encourage network upgrades and competitive entry;
3. Reform current universal service mechanisms to support the deployment of broadband and voice in high-cost areas; and ensure that low income Americans can afford broadband; and in addition, support efforts to boost adoption and utilization; and
4. Reform laws, policies, standards, and incentives to maximize the benefits of broadband in sectors the government influences significantly, such as public education, health care, and government operations.

and six long-term goals, to be a guide for the next decade:

1. At least 100 million US homes should have affordable access to actual download speeds of at least 100 mbps and actual upload speeds of at least 50 mbps;
2. The US should lead the world in mobile innovation, with the fastest and most extensive wireless networks of any nation;
3. Every American should have affordable access to robust broadband service, and the means and skills to subscribe if they so choose;
4. Every American community should have affordable access to at least one gigabit per second broadband service to anchor institutions such as schools, hospitals, and government buildings;
5. To ensure the safety of Americans, every first responder should have access to a nationwide, wireless, interoperable broadband public safety network; and
6. To ensure that America leads in the clean energy economy, every American should be able to use broadband to track and manage their real-time energy consumption.

This is certainly an ambitious agenda, but one that is necessary in order for broadband to indeed become universal.

Impact on Low Income Households
For PULP, the most relevant portions of the National Broadband Plan are how it proposes to bridge the digital divide and provide a means for low income households to afford broadband. This is the subject of the grant proposal PULP submitted as part of the ARRA Stimulus Plan. While we were unsuccessful in the first round of consideration, we re-submitted our application on March 15th as part of the larger grant request sought by Cornell Cooperative Extension to promote educational opportunities. PULP is optimistic that the synergies between the two proposals will result in a successful application. We have some FCC-based research to back this up: In a survey recently conducted by the FCC, 36% of non-users cited cost as the determining factor for not subscribing to broadband , adding credence to PULP’s affordability proposals.

The FCC’s National Broadband Plan’s Availability and Adoption and Utilization chapters include three elements to help ensure all Americans have the opportunity to reap the benefits of broadband:

(1) All Americans should have access to broadband service with sufficient capabilities;
(2) All should be able to afford broadband; and
(3) All should have the opportunity to develop digital literacy skills to take advantage of broadband.

PULP wholeheartedly supports all three elements and addressed the second two items in its broadband grant application.

Recommendations
To achieve these elements, several recommendations are offered:
(1) Ensure universal access to broadband network services.

(a) Create the Connect America Fund (“CAF”) to support the provision of affordable broadband and voice with at least four mbps download speeds and shift up to $15.5 billion over the next decade from the existing Universal Service Fund (“USF”) program to support broadband. The FCC left it to Congress to decide whether to make available public funds of a few billion dollars per year over two to three years as a means to accelerate the deployment of broadband to unserved areas.
(b) Create a Mobility Fund to provide targeted funding to ensure no states are lagging significantly behind the national average for 3G wireless coverage.
(c) Transition the existing High-Cost component of the USF (which provides support in rural areas to ensure comparable customer rates to urban areas) over the next 10 years and shift all resources to the new funds. The $4.6 billion-per-year High Cost component of the USF was designed to support voice services and would be replaced over time by the CAF.
(d) Over the next 10 years, reform intercarrier compensation, which provides implicit subsidies to telephone companies, by eliminating per-minute charges and enabling adequate cost recovery through the CAF.
(e) Design the new CAF and Mobility Fund in a tax-efficient manner to minimize the size of the broadband availability gap and thereby reduce contributions borne by consumers.
(f) Broaden the USF contribution base to ensure USF remains sustainable over time. Currently, only voice providers contribute to the Fund, including landline, wireless, and Voice over Internet Protocol (“VoIP”) providers.

(2) Create mechanisms to ensure affordability to low income Americans.

(a) The FCC should consider free or very low-cost wireless broadband as a means to address the affordability barrier to adoption.

(3) Expand the Lifeline and Link-Up programs by allowing subsidies provided to low income Americans to be used for broadband.

(a) The FCC and states should require eligible telecommunications carriers (“ETCs”) to permit Lifeline customers to apply Lifeline discounts to any service or package that includes basic voice service.
(b) The FCC should integrate the expanded Lifeline and Link-Up programs with other state and local e-government efforts.
(c) The FCC should facilitate pilot programs that will produce actionable information to implement the most efficient and effective long-term broadband support mechanism, including subsidies for installations (such as Link-Up) and customer premises equipment (including computers and modems).

(4) Ensure every American has the opportunity to become digitally literate.

(a) Launch a National Digital Literacy Corps to organize and train youth and adults to teach digital literacy skills and enable private sector programs addressed at breaking adoption barriers.
(b) Congress, the Institute of Museum and Library Services (“IMLS” ), and the Office of Management and Budget should commit to increase the capacity of institutions that act as partners in building the digital literacy skills of people within local communities.
(c) Congress should consider providing additional public funds to IMLS to improve connectivity, enhance hardware, and train personnel of libraries and other community-based organizations (“CBOs”).
(d) OMB, consulting with IMLS, should develop guidelines to ensure that librarians and CBOs have the training they need to help patrons use next-generation e-government applications.
(e) Congress should consider funding an Online Digital Literacy Portal.

It is easy to be overwhelmed with the FCC’s recommendations. They discuss revamping intercarrier compensation (such as access charges and reciprocal compensation), creating and reworking universal service programs, expanding Lifeline offerings, and stressing digital literacy. These items, in one form or another, had been languishing for years at the FCC, with past administrations lacking the wherewithal to bring them forward either piecemeal or whole cloth. (Remember back in 2004 when then-President Bush called for broadband in “every corner” of the US by 2007? ) Dare we say that this is an “audacious” agenda? With an emphasis on universal connectivity and job creation, there is hope that most or all of the proposals will become implemented – sometime in the next 10 years.

That said, PULP will cast a wary eye on and fight any efforts to completely eliminate high cost and low income support for voice services. Even by 2020, we do not believe that there will no longer be a need to assist voice customers in rural areas and low income households in all areas. PULP also wants to ensure that the continuing support for voice includes bundled services, such as voice with broadband. Whether combined with the CAF (and used to support broadband access and voice) or retained as stand alone funds for voice customers, PULP will continue to be vigilant when it comes to protecting the rights of residential utility customers should their access to affordable, reliable voice service be put into question. These rights should be explicitly technology neutral and apply to traditional landline, VoIP, and wireless services.

Lou Manuta

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