New Developments in Broadband – May

Broadband on Capitol Hill

House Democrats have unveiled their $2 trillion dollar infrastructure package called the "Leading Infrastructure for Tomorrow's America Act" (LIFT America Act). A House hearing was held May 22 with testimony from, among others, former FCC Commissioner Clyburn. The legislation includes $45 billion in broadband funding: $30 billion in reverse auction funds to be administered by the FCC, $10 billion in reverse auction funds to be administered by the states, and $5 billion in federal loans and loan guarantees to be administered by NTIA. Although President Trump has expressed general support for the package, political volatility between House Democrats and the President makes passage this year very uncertain.

Here are a few other broadband bills we are watching: Senator Wicker (R-MS) has introduced the "Broadband Interagency Coordination Act." Co-sponsored by Senator Klobuchar (D-MN), the bill would require NTIA, FCC, and USDA to coordinate broadband funding through a standardized set of broadband coverage data - but would give FCC primary responsibility for that data. A similar measure - the ACCESS BROADBAND Act - would establish an Office of Internet Connectivity and Growth within NTIA and passed the House by voice-vote on May 9. This bill would place NTIA in a formal advisory role regarding the coordination of all federal broadband spending.

Senators Blackburn (R-TN) and Baldwin (D-WI) have introduced the "Internet Exchange Act" to provide NTIA-administered matching grants for internet exchange (IX) facilities in certain core-based statistical areas and would permit USF E-rate and Rural Health Care (RHC) program recipients to use their funding to contract with an ISP to connect to an IX facility or pay the costs of maintaining a point of presence at a facility.

Finally, Reps. Mullin (R-OK) and Peterson (D-MN) have introduced the "Rural Broadband Network Advancement Act" (RBNA). The RBNA establishes a new FCC program outside of the existing universal service mechanisms that would collect network user fees from edge providers based on the data transported over the last mile of networks and these fees would be invested by rural broadband providers to help build, maintain and operate robust broadband networks in high-cost rural areas.

NTIA

On May 9, 2019, NTIA Administrator David Redl unexpectedly resigned. Although Redl has had policy disagreements with the FCC and State Department in his 18 months in the position, no obvious reason for his departure has emerged. Deputy Administrator Diane Rinaldo will be interim Administrator with no replacement nominee likely before the 2020 election cycle.

The next NTIA broadband webinar is Wednesday, June 19, and will discuss Building Smart Cities and Communities at the Regional Level The archive for previous webinars are available here. The BroadbandUSA Newsletter for May is available here.

USDA - Rural Utilities Service

The ReConnect broadband funding program has received criticism from some who have concluded the application process is too complex and not worth the effort given restrictions on where funding is available. OTELCO - which owns a number of independent carriers in several states - explained their problems with the program in Broadband Communities Magazine this month:

Identifying an area that has a population of only six per square mile but has a high enough density of community anchor institutions, farms and other businesses to score well on the first three criteria will be challenging indeed. It will also likely require service areas to be large, which will be problematic for community networks and small ISPs. Finding these things in an area that is 90 to 100 percent unserved by at least 10 Mbps/1 Mbps and is not funded by CAF is virtually impossible.

The filing deadline for ReConnect Program 100% grant applications was May 31, 2019.

Federal Communications Commission

Chairman Pai has announced the terms under which he is willing to recommend approval of the Sprint/T-Mobile merger. That issue is beyond the scope of this blog post but it has large implications for the country. The approval is largely being driven by the purported benefits the merger will have for 5G rollout. It also will have implications on the EBS proceeding (see below) given a large number of EBS licenses are held by Sprint.

The tentative agenda for the Commission's next meeting on June 9 can be found here. A recording of the May 9, 2019, open meeting can be streamed here. Among other things, the Commission unanimously voted to deny on national security grounds an application by China Mobile Telecom to provide international telecommunications services in the U.S.

Rural Digital Opportunity Fund

No new details regarding the $20.4 billion "Rural Digital Opportunity Fund" (RDOF) have emerged since it was announced by Chairman Pai in April. The new fund will apparently repurpose a portion of existing High Cost program universal service funding (i.e., the Connect America and Mobility Funds) over a ten-year period in order to connect up to 4 million rural homes and businesses to high-speed internet. A draft NPRM on the RDOF is expected to emerge later this year.

USF Spending Cap NPRM

The Commission has released a Notice of Proposed Rulemaking (NPRM) to consider rules to cap overall USF spending - this would be in addition to the program-specific caps that may be in place. The idea of an overall USF budget has been championed by Commissioner O'Rielly for years and he is the item's principal proponent. The two Democratic Commissioners (Stark and Rosenworcel) dissented from approving the NPRM. Initial comments will be due 30 days after the item is published in the Federal Register with reply comments due 30 days later.

E-rate

Commissioner O'Rielly's efforts to address "overbuilding" in the E-rate program have culminated in a petition for rulemaking filed by two rural Texas carriers to modify E-rate rules. The Texas carriers proposed the following language be added to the rules: "Category One services shall not include special construction costs for the construction of fiber where it has been demonstrated that fiber already exists, unless the existing fiber owner is unwilling to negotiate in good faith to lease that fiber at reasonable market-based prices." The Wireline Competition Bureau is now seeking public comments on the petition.

Reports are that an NPRM is circulating at the Commission that would make permanent the current E"rate Category 2 budgets process. This NPRM has been widely expected since the Bureau released its report on Category 2 budgets earlier this year.

Rural Health Care Program

The FCC has released an expected order which allows the release of long-delayed Healthcare Connect Fund (HCF) consortium funding commitments held by USAC. The commitments were held because multi-year requests and upfront costs (i.e., fiber and special construction) in funding year (FY) 2018 (July 1, 2018 through June 30, 2019) exceeded the $150 million HCF sub-cap (FY 2018 funding demand details here). The FCC's order reduces all three-year funding requests to a single-year and fully funds them along with requests for upfront costs. While the overall program demand was below the overall program cap for FY 2018, the trend suggests the overall cap may be exceeded in FY 2019.

The Schools Health & Libraries Broadband (SHLB) Coalition is sponsoring an event in Dirksen Senate Office Building on June 10, 2019, entitled "Improving Rural Healthcare with Broadband and Telehealth."

Educational Broadband Service (EBS)

We are past the one-year anniversary of the FCC's EBS notice of proposed rulemaking (NPRM) (background at the end of this item) and, with an order expected soon, Chairman Pai is reportedly leaning toward endorsing auctions of the remaining unused EBS spectrum.

Net Neutrality

The House passed the "Save the Internet Act" legislation in April which would restore the FCC's 2015 net neutrality rules including classifying broadband as a regulated telecommunications service under Title II of the Communications Act. With no chance of that bill passing the Republican-controlled Senate, Republicans and some Democrats are focusing on potential compromises. Senators Wicker (R-MS) and Sinema (D-AZ) formed a bi-partisan working group in March on the Senate side to focus on creating legislation capable of passing both houses. Reports are that a similar working group is possible on the House side.

Federal Courts

• 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.

• 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 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.
• 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 the DC Circuit case (above).

States

The National Conference of State Legislators (NCSL) features an up-to-date summary of state net neutrality efforts by state legislators for 2019 here (updated May 6, 2019).

As always, if you have any questions about these updates, please make sure to contact your attorney.