New Developments in Broadband – June

Capitol Hill

We continue to expect that House Democrats will pass their "Leading Infrastructure for Tomorrow's America Act" (LIFT America Act) infrastructure proposal, however, any deal with President Trump on infrastructure remains on hold. The House bill includes $45 billion in broadband funding - $30 billion in reverse auction funds to be administered by the Federal Communications Commission ("FCC" or the "Commission"), $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 National Telecommunications and Information Administration (NTIA).

Here are links to some additional broadband bills we are following

• The Broadband Deployment Accuracy and Technological Availability (Data) Act (Sens. Roger Wicker (R-MS) and Gary Peters (D-MI)) would require the FCC to issue rules to collect more "granular" broadband coverage data.
• The Broadband Interagency Coordination Act (Sens. Roger Wicker (R-MS) and Amy Klobuchar (D-MN)) would require NTIA, FCC, and United States Department of Agriculture (USDA) to coordinate broadband funding through a standardized set of broadband coverage data - but would give FCC primary responsibility for that data.
• The ACCESS BROADBAND Act would establish an Office of Internet Connectivity and Growth within NTIA and place NTIA in a formal advisory role regarding coordination of all federal broadband spending.
• The Internet Exchange Act (Sens. Marsha Blackburn (R-TN) and Tammy Baldwin (D-WI)) would provide for NTIA-administered matching grants for Internet exchange (IX) facilities in certain core-based statistical areas and would permit Universal Service Fund (USF) E"rate and Rural Health Care (RHC) program recipients to use their funding to contract with an Internet Service Provider (ISP) to connect to an IX facility or pay the costs of maintaining a point of presence at a facility.
• The Rural Broadband Network Advancement Act (Reps. Markwayne Mullin (R-OK) and Collin Peterson (D-MN)) would establish a new FCC program outside of the existing universal service mechanisms to collect network user fees from edge providers based on the data transported over the last mile of networks to be invested by rural broadband providers to help build, maintain and operate robust broadband networks in high-cost rural areas.

NTIA

NTIA has released a searchable database featuring 50 federal broadband funding opportunities across a dozen federal agencies. The June 19 NTIA broadband webinar discussing Building Smart Cities and Communities at the Regional Level is available in the archive here. The BroadbandUSA Newsletter for June is available here.

USDA - Rural Utilities Service

With the deadline for ReConnect grants now passed, the status of proposed projects can be viewed on an interactive map available here. Reports are that demand substantially outstripped available funds for all components of the program (grants, loan/grants, and loans).

In April, USDA issued a report on rural broadband infrastructure focused on next-generation precision agriculture. Relatedly, the FCC has announced the formation of a federal advisory committee on precision agriculture. Nominations for people to serve on this advisory committee are due to PrecisionAgTF@fcc.gov by July 17.

Federal Communications Commission

The tentative agenda for the Commission's next meeting on July 10 can be found here. Two items we have been following will be voted on: Educational Broadband Services (EBS), and the $100 million Connected Care pilot program. Those are discussed briefly below.

USF Contributions

On June 13, the FCC announced that the expected third quarter USF contribution factor would rise to 24.4% - the largest quarterly factor in the history of the program. The spike appears to be driven by the shrinking base of interstate and international telecommunications revenue rather than growing programs.

USF Spending Cap NPRM

The USF spending cap Notice of Proposed Rulemaking (USF NPRM) was released May 31 after being approved on a party-line vote (both Democratic Commissioners opposing) earlier in the month. The proposed cap would apply to all four programs in the aggregate, in addition to program-specific caps or budgets that currently exist. The USF NPRM also seeks comment on whether to allow the E-rate and RHC programs to access unused funding from the other programs. Comments are due July 15, 2019; reply comments are due August 12, 2019.

$100 Million Connected Care Pilot Program

The FCC has released a draft NPRM seeking comment on how to implement a three-year $100 million universal service pilot program that would fund broadband costs associated with providing "connected care" to low-income Americans and veterans. Connected care is generally the remote patient monitoring and telehealth services needed to provide care for chronic health conditions to patients in their homes. This item is expected to be approved. We will explore this item further next month.

2019 Broadband Deployment Report and Mapping

The annual Broadband Deployment Report for 2019 is out, triggering the perennial criticism about the accuracy of the underlying data and whether the FCC is meeting its statutory obligations to ensure broadband is being deployed on a reasonable and timely basis. Relatedly, USTelecom and major industry groups reported on their efforts to establish new mapping protocols. If you are interested in where broadband mapping may be headed, you can review their recent filing here.

Rural Digital Opportunity Fund

No new details regarding the $20.4 billion "Rural Digital Opportunity Fund" (RDOF) have emerged since it was announced by FCC Chairman Ajit 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.

E-rate

"Overbuilding"

The FCC is seeking comment on a petition for rulemaking in the E-rate program filed by several small Texas telcos that claim E-rate rules are supporting improper overbuilding of their networks. Comments were due July 1; replies are due July 16.

Category 2 Budgets

An NPRM that proposes to make Category 2 budgets a permanent feature of the E-rate program is reported to be circulating for a vote. This was an expected development after the Wireline Bureau issued its report earlier this year finding that the Category 2 budget approach was working well. You will recall that the 2014 E-rate Modernization Order 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.

Rural Health Care Program

The FCC announced on June 10 that it was directing USAC to carry forward $83 million in unused support from prior years and make that available for Funding Year (FY) 2019 (July 1, 2019 through June 30, 2020). This means there will be $677 million ($594 million plus $83 million) available for FY 2019. By comparison, 2018 funding demand was $648 million.

Educational Broadband Service (EBS)

The draft EBS order which was just released proposes to auction the reallocated the 2.5 GHz band, arguing the spectrum is needed for rural 5G deployment and that too much of the spectrum is lying fallow.

Net Neutrality

Federal legislative efforts to address net neutrality appear to have reached a stalemate. 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. Subsequent efforts to create a bi-partisan House-Senate working group are likely dead due to lack of support from House Democrat leaders who believe the House's Save the Internet Act would pass the Senate if allowed to come up for a vote. Senate Majority Leader Mitch McConnell (R-KY) has refused to allow such a vote.

In the meantime, The Internet Society's Net Neutrality Experts' Roundtable has released a process report addressing its attempts to convene and facilitate a workable consensus.

States

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