TMT with Mike O'Rielly - Ep 15: Structural Problems in the ACP

Episode 15 of "TMT with Mike O'Rielly," a videocast that features former FCC Commissioner and Adjunct Senior Fellow at the Free State Foundation Michael O'Rielly, was released on December 6. This episode, titled "Structural Problems in the Affordable Connectivity Program," is a conversation between Mr. O'Rielly and guest Ryan Tracy, Co-Writer at Capital Account. Streaming video of the Episode 15 is now available: 

Direct-to-Cell Innovation Will Expand Broadband Access to All Americans

On November 26, the FCC issued an order that granted low-earth orbit (LEO) satellite broadband provider Starlink authorization to provide Supplemental Coverage from Space (SCS) and operate on certain spectrum bands for direct-to-cellular (direct-to-cell) operations, under certain conditions. Direct-to-cell, sometimes called direct-to-device (D2D), is the technological capability of connecting satellite broadband networks to standard terrestrial mobile cellular wireless smartphones. Starlink reportedly has an agreement with nationwide mobile wireless network provider T-Mobile, under which it will provide mobile Internet connectivity in the US exclusively to T-Mobile for one year. 

Additionally, AT&T and Verizon reportedly have entered into commercial agreements with LEO satellite network provider AST SpaceMobile. AST SpaceMobile will be using spectrum in the 850 MHz band licensed by AT&T and Verizon, whereby AST SpaceMobile will provide direct-to-cell capability and thus enable mobile wireless broadband coverage to 100% of the geography of North America. 

As I wrote in a December 2023 blog post, smartphone access to satellite broadband networks is a stellar example of the broadband market's dynamism. Near-future commercial availability of direct-to-cell capability by competing mobile wireless broadband providers in partnership with LEO satellite network operators is innovative, enhances competition, and doubtless will improve access to broadband for Americans. 

 

Indeed, the important potential improvement in broadband access enabled by direct-to-cell innovation should factor into the FCC's forthcoming Section 706 Report as well as its forthcoming Communications Marketplace Competition Report. In assessing progress in deploying advanced capabilities in a reasonable and timely fashion to all Americans and in analyzing market competition for broadband services, the Commission should take a forward-looking analysis rather than rely on static snapshots in time from the past. 

 

For the Commission, direct-to-cell capability ought to serve as a reminder that private market investment and innovation drive the improvement and expansion of broadband networks far more than slow-moving subsidy programs such as the Broadband Equity, Access, and Deployment (BEAD) program that draw from the public treasury – and ultimately from US taxpayers. During the next Trump Administration, the FCC should return its focus to promoting private network investment and innovation and to eliminating rate regulation and other burdensome, costly restrictions that harm market competitiveness and fail to meaningfully benefit consumers. 

 

This year, the Free State Foundation filed public comments and reply comments with the FCC in its current Section 706 report proceeding. FSF also filed public comments and reply comments in the Commission's current Marketplace Competition Report proceeding. 

FCC Opens New Inquiry into the State of Broadband Deployment

On September 6, the FCC announced that it was opening its eighteenth inquiry on the state of broadband in the U.S., which is expected to culminate in the next iteration of the Commission’s Section 706 report. Under Section 706(b) of the Telecommunications Act of 1996, the Commission is required to annually determine "whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion." In other words, for the upcoming report, the Commission is required to assess whether broadband Internet access service – an advanced telecommunications service under the statute – is being timely deployed to all Americans.

Earlier this year, the Commission initiated a proceeding for its forthcoming Communications Marketplace Competition report – a different report that includes an assessment of the broadband market over the previous two years. In public comments filed in June of this year, Free State Foundation scholars wrote: "In 2022 and 2023, overall conditions in the broadband Internet services market were effectively competitive, in many instances even more so than in 2020 and 2021 when this was already the case." FSF's comments cited publicly available data points, including broadband provider quarterly reports and analyst estimates, about fiber deployments, cable broadband network upgrades and footprint expansion, nationwide 5G network upgrades and new deployments, 5G fixed wireless access (FWA) entry in the residential broadband market, cross-platform competition from cable-hybrid wireless providers, and improvements in satellite broadband capabilities to support that conclusion. 

 

The pro-deployment trends from 2022-2023 identified on FSF's comments in the 2024 Communications Marketplace Competition Report proceeding appear to support an affirmative answer to the question that the Commission is addressing in its upcoming Section 706 report. Yet the Commission's just-opened Section 706 proceeding will provide a forum for considering more recent data about availability and deployment progress and enable a more definitive determination about the current state of ongoing broadband deployment. 

 

Expect Free State Foundation scholars to have more to say this year about the state broadband deployment to all Americans. FSF's public comments from December 2023 that were filed in the Commission's previous Section 706 report proceeding can be found on FSF's website.

The FCC's New RBAT

As reported by Christopher Cole in Law360 [subscription required], the FCC has launched a "rapid response team" to help resolve disputes between utility pole owners and broadband Internet service providers regarding the cost of upgrading or replacing poles to allow the attachment of the ISPs' broadband equipment. The official name of the new unit is "Rapid Broadband Assessment Team" or "RBAT."

According to the FCC's Enforcement Bureau Notice:

"The RBAT is charged with prioritizing and expediting the resolution of pole attachment disputes that are impeding or delaying the deployment of broadband facilities and providing coordinated review and assessment of those disputes. The RBAT will swiftly engage stakeholders, gather essential information, and distill issues in dispute. It will then provide guidance and advice to parties on the most effective means of resolving their dispute including, but not limited to, RBAT-supervised mediation. The RBAT also may decide if a complaint (or portion of a complaint) is suitable for placement on the FCC’s Accelerated Docket based on consideration of specified criteria."

The inter-agency RBAT is supposedly staffed with experts regarding the FCC's pole attachment rules.

Pole attachments are an integral part of the overall infrastructure to facilitate the deployment of high-speed broadband networks, and, obviously, speedy resolution of pole attachment disputes is important in deploying broadband sooner rather than later.

It's good that the FCC has taken this step to establish the RBAT. And it's good to know that the RBAT is staffed by experts.

But what's also needed is the will to make the RBAT effective, especially with respect to rapid action. As they say, the proof will be in the RBAT pudding.

MEDIA ADVISORY: FSF Scholars Submit Ex Parte Regarding the FCC's Digital Discrimination Proceeding

Free State Foundation President Randolph May and Director of Communications Policy Studies Seth Cooper submitted the attached written ex parte presentation to the FCC emphasizing the importance of the agency following Congress’s directive to account for “technical and economic feasibility” in considering alleged complaints of digital discrimination. Below are two paragraphs excerpted from the beginning of the ex parte submission:

In Section 60506(a) of the Infrastructure Investment and Jobs Act of 2021, Congress expressly stated that, in implementing the Commission's mandate to take steps to ensure that all Americans benefit from equal access, the agency must consider issues of “technical and economic feasibility.” Congress thereby dictated that broadband providers must remain free to make informed business judgments regarding matters such as the size of their investments in relation to the availability and cost of capital, the geographic reach of planned deployments by the provider and competitors, the cost of the underlying technologies employed considered for deployment, the timing of new deployments, and other similar considerations. They are all market-related factors affecting economic feasibility assessments.

The congressional requirement that economic feasibility factors be taken into account requires acknowledgement by the Commission that deployment and non-deployment decisions of broadband providers to certain locations routinely, and necessarily, involve business judgements that have absolutely nothing to do with invidious discrimination. When confronted with a complaint alleging discrimination, in addition to the above considerations, “economic feasibility” is properly informed by factors such as: (1) whether a grant-making entity (say, in the BEAD context) delineates the deployment areas that are being subsidized; (2) whether the area subject to question is receiving, or is slated to receive, federal or state subsidized build-outs; (3) whether another provider is already providing service, or is slated to offer service, at comparable speeds and with comparable quality of service metrics; (4) regulatory or procedural requirements that increase costs prohibitively; and (5) whether the provider does not provide service in the complainant’s area using the technology the complainant prefers. As explained in FSF’s comments and reply comments, when broadband providers make deployment decisions based on economic feasibility reasons such as those above, the Act forbids the Commission from treating those decisions as wrongful.

Video and Audio Available for Webinar on FCC's Digital Discrimination Rulemaking

On June 23, the Federalist Society hosted a webinar titled "The FCC's Digital Discrimination Rulemaking: Facilitating Equal Access to Broadband Services." Video and audio of the event are now available for streaming and download:

Free State Foundation President Randolph May moderated the discussion amongst panel participants Harold Feld of Public Knowledge, Clint Odom of T-Mobile, and myself. The webinar included discussion of the FCC's authority under Section 60506 of the Infrastructure Investment and Jobs Act of 2021. Does Section 60506 confer authority on the agency to adopt rules that would impose liability on broadband providers based only on a showing of unintentional disparate impact? Or does the statute require evidence of intentional discrimination. And what effect might disparate impact liability have on efforts to ensure equal access to broadband Internet services? Check out the online video or listen to the podcast to hear thoughtful insights on these and related matters. 

 

In public comments and reply comments filed with the FCC in its digital discrimination rulemaking proceeding, FSF President Randy May and I concluded that Section 60506 of the Infrastructure Act contains an intent-based standard for rules prohibiting digital discrimination, and that the text of statute does not support the imposition of unintentional disparate impact liability on broadband Internet service providers. During the webinar event, I emphasized that Section 60506 contains specific language that calls for an intent-based anti-discrimination rules and that the statute does not contain hallmark catchall terms that courts have identified as authorizing or permitting unintentional disparate impact claims. For discussion about that issue more, check out the webinar.

FSF Perspectives on How the FCC Should Define and Address Digital Discrimination

On December 22, the FCC released its notice of proposed rulemaking to combat digital discrimination. Free State Foundation President Randolph May and I offered our reaction to the Commission's notice in a December 21 press release. Additionally, our views regarding the proper interpretation of the statutory definition of "digital discrimination" and policy that will best help to close the digital divide and ensure equitable access to broadband Internet services are expressed our October 14 Perspectives from FSF Scholars, "The FCC Should Reject a Disparate Impact Standard: Targeted Subsidies Should Be Used to Address Deployment Gaps." As we wrote in the
introduction: 

To date, there is no evidence of intentional discrimination in broadband deployment on account of income, race, or ethnicity. Nonetheless, debate has arisen over whether the Commission's rules should go beyond preventing intentional discrimination to impose liability on broadband Internet service providers (ISPs) on the basis of disparate impact – that is, on the basis of practices that are acknowledged to be nondiscriminatory on their face, but which are claimed to result in adverse effects on legally protected groups. 

The Commission should follow Congress's instructions in the Infrastructure Investment and Jobs Act of 2021 by barring intentional discrimination. To the extent that there are, in fact, any areas disparately impacted by broadband deployments or practices, whether unintended or beyond ISPs' control, Congress and the Commission ought to subsidize, on a targeted basis, buildouts to ensure equal access and take other properly targeted remedial measures that will accelerate broadband deployment to all Americans.

President May and I also offered our views regarding the makeup of the Commission's forthcoming anti-discriminatory model policies and best practices for state and local governments in in our November 30 Perspectives from FSF Scholars, "FCC Should Rely on Pro-Deployment Actions to Avoid Digital Discrimination":

[T]he FCC should decline to include disparate impact liability in any model policies, best practices, or rules that it develops. Instead, the Commission should focus proactively on ways for state and local governments, ISPs, and local communities to identify unserved or underserved areas and help get them connected. And the Commission should recommend that states and local governments accelerate deployment, including by reducing permit approval time lags as well as by eliminating any other procedural impediments to constructing broadband infrastructure. 

Both Perspectives papers go into more detail regarding recommended next steps for the Commission. Expect FSF scholars to further address the Commission's proposed rules regarding digital discrimination in 2023.  

Report Touts Benefits of Fiber Broadband Speeds and Pricing for Americans

On August 23, the Fiber Broadband Association released a report titled "A Detailed Review: The Status of U.S. Broadband and the Impact of Fiber Broadband." The report was prepared by Michael C. Render of market research and consulting firm RVA, LLC. It contains several interesting data points regarding broadband Internet access and fiber-to-the-home (FTTH) services in America.  

Relying on data from Pew Research, the report found that about 92% of Americans have Internet access at home, with 77% having wired service and 15% with wireless service. In terms of market share, the report found that about 49% of Americans with Internet access at home subscribed to cable broadbands, 21.3% subscribed to FTTH services, 13.1% still subscribed to DSL services, 11.7% subscribed to mobile wireless services, 3.1% subscribed to fixed wireless services, and 0.9% subscribed to satellite broadband services. Notably, many cable subscribers are actually served by FTTH services. 

 

On a side note, one can expect the market share for DSL to decline and for fiber as well as fixed wireless connections to rise over the next few years. And it will be interesting to see how the future rollout of multi-gigabit 10G cable broadband platform will impact broadband market share in the times ahead. 

 

Additional data points contained in the report include:

• "The average download speed experienced by users as tested in the annual FBA/ RVA random survey of Internet users…has increased from about 4 Mbps download to 121 Mbps from 2009 to 2022." 
• "Average U.S. upload speeds have increased from about 0.4 Mbps to 26 Mbps in the same period. The upload to download ratio was 11% in 2009 and has increased to 26% in 2022."
• Average download/upload speeds for FTTH services clock at 199 Mbps/75 Mbps.
• "The cost per provided Mbps (cost divided by the number of Mbps received downstream) has decreased very dramatically from about $9.00 to about $0.55 since 2010." 

The report is available on the FBA's website. 

PLAN for Broadband Act Addresses Funding Coordination Concerns

On August 4, Senators Roger Wicker and Ben Ray Lujan introduced the Proper Leadership to Align Networks (PLAN) for Broadband Act. That same day, a companion bill was introduced in the House by Representatives Tim Walberg and Peter Welch. The PLAN for Broadband Act would require the President, in consult with the heads of several federal agencies, to develop a "National Strategy to Close the Digital Divide" as well as an "Implementation Plan." Under the Act, the National Strategy would have to be submitted to Congress within one year of the legislation's enactment, and the Implementation Plan would have to be submitted to Congress 120 days later. 

The PLAN for Broadband Act was prompted by a May 2022 report by the Government Accountability Office (GAO) titled "Broadband: National Strategy Needed to Guide Federal Efforts to Reduce Digital Divide." As Free State Foundation Senior Fellow Andrew Long explained in a June 14 blog post, the GAO report warned about significant wasteful duplication of funding and effort to increase broadband access that could result from the lack of coordination among over 133 broadband access-related funding programs under the purview of 15 different agencies. To address this concern, the GAO report recommended that the Executive Office of the President develop and implement a national broadband strategy. 

The sponsors of the PLAN for Broadband Act deserve credit for calling attention to the issue of duplicative wasteful spending and for seeking to improve the effectiveness and efficiency of federal efforts to close the digital divide. In the meantime, nothing ought to prohibit federal agency heads from closely coordinating their efforts to expand broadband access to all Americans and to protect taxpayer dollars from being wasted. 

#FSFConf14: FCC Commissioner Carr Addresses Agency Coordination and Connecting Unserved Americans

The Free State Foundation's Fourteenth Annual Policy Conference – #FSFConf14 – took place on May 6 in Washington D.C. The conference's kickoff panel included current FCC Commissioners Brendan Carr and Nathan Simington, along with former FCC Commissioner Mignon Clyburn. Among the communications law and policy topics discussed by the panelists was the implementation massive broadband subsidy programs such as the Broadband Equity, Access, and Deployment Program ("BEAD Program").

During the panel, Commissioner Carr had much to say regarding interagency coordination and oversight of BEAD and other broadband subsidy programs: 

We now have, for the first time that I am are of, significant federal resources and enough federal resources to actually eliminate the digital divide in this country. Now the hard part is over. The exceptionally difficult part is still to come, which is implementing those programs. And I remain very concerned that we do not have the right policy cuts and in place and the right coordination across agencies to effectively get those dollars into the ground connecting communities. 

 

From my count, if you look across the agencies that have been given federal dollars over last 18 months, money that could be used for broadband and that is eligible for broadband infrastructure, by my count, its over $800 billion… If you assume the number [we need to end the digital divide in this country] is $80 billion, we've got ten times that amount of money that's already been appropriated or budgeted for the agencies. And I'm very concerned that we’re going to flash forward a couple of years, the $800 billion dollars is going to be gone and we’re still going to have a significant portion of the digital divide that we didn’t close.

Commissioner Carr related to the audience at #FSFConf14 that he sent letters to several federal agencies asking them how they are going to distribute funds, what maps they are going to use, and whether they are fully coordinated. He added that: "[h]alf never responded" and "[A]nswers that did come didn't give comfort.

 

Apart from the interagency coordination challenge, Commissioner Carr also offered his On the policy perspective in administering BEAD and other federal subsidy programs for broadband:

We have to prioritize the unserved. These are communities that have zero megabits per second over zero megabits per second. There are still too many of them in this country. And I understand the desire to get everybody to megabit speeds. I understand the desire to get multiple choices for your broadband dollars. But we have to elevate and prioritize those communities that are truly on wrong side of digital divide. … I don’t think we’re doing that across a lot of measures, in part because we’re defining lack of service as potentially places that have almost 80 over 20 and we’re treating them the same for a prioritization mechanism as zero over zero. That makes no sense, in my mind. 

For more from Commissioner Carr as well as from Commissioner Nathan Simington and former Commissioner Mignon Clyburn, check out the video for #FSFConf14. Views expressed by Commissioner Clyburn during the panel regarding the broadband subsidy programs and agency sharing of information are quoted in a May 27 blog post. 

 

Free State Foundation scholars also have weighed in on important implementation issues for BEAD and other broadband subsidy programs. See FSF Senior Fellow Andrew Long's May 24 Perspectives from FSF Scholars, "Future Guidance Can Fix NTIA’s Flawed 'Fiber-First' Approach" and my May 26 Perspectives, "NTIA's Broadband Subsidies Must Respect State Law Limits on Government-Owned Networks." Also, in a May 13 Media Advisory, I emphasized the importance of NTIA and the states prioritizing broadband deployment to truly unserved Americans and not subsidizing overbuilds or open access network management models that won't help connect anyone.  

 

(*Note: The #FSFConf14 quotes contained in this blog are based on an unofficial, edited transcription made by the author of this blog. The edits were made for purposes of readability but none of the meaning was changed in doing so.)

Broadband Funding Agencies Ink Data-Coordination MOU

On May 11, 2022, all four federal agencies responsible for distributing hundreds of billions in broadband infrastructure subsidies announced that they had agreed "to share information about and collaborate regarding the collection and reporting of certain data and metrics relating to broadband deployment."

Pursuant to their Memorandum of Understanding (MOU), and consistent with arguments I made in a recent Perspectives from FSF Scholars, the FCC, NTIA, Department of Agriculture, and Department of Treasury will work together to leverage the FCC's soon-to-be-released broadband service availability maps (among other resources) to disseminate and display publicly "information about projects that have received or will receive funding from" the various programs that they administer.

As I explained in "Overlapping Broadband Appropriations Demand Agency Coordination: New FCC Maps Can Track Grants, Avert Waste," a March 2022 Perspectives, the Consolidated Appropriations Act, 2021 directed NTIA, the FCC, and Agriculture's Rural Utilities Service to "share information with each other about existing or planned projects that have received or will receive funds under the programs" for which those three agencies are responsible. That statutory requirement led to the release of an interagency agreement on June 25, 2021.

Notably, however, Treasury, which was tasked by the American Recovery Plan Act to oversee the $350 billion State and Local Fiscal Recovery Funds as well as the $10 billion Coronavirus Capital Projects Fund, was not a party to that agreement.

The MOU released on May 12, 2022, which supplements rather than supplants the prior three-party agreement, addresses that concern by bringing Treasury into the fold.

Given the vast amount of money at stake in these overlapping programs designed to connect those Americans still unserved, effective coordination is essential to avoid redundant grants, overbuilds, and waste, fraud, and abuse. The transparency and enhanced oversight made possible by this latest interagency pact hopefully will ensure that such coordination indeed does take place.

MEDIA ADVISORY: NTIA Releases Notice of Funding Opportunity for the BEAD Program

The following statement may be attributed to Free State Foundation Director of Policy Studies & Senior Fellow Seth Cooper:

On May 13, NTIA released its anticipated Notice of Funding Opportunity as part of the agency's implementation of the Broadband Equity, Access, and Deployment Program ("BEAD Program"). NTIA deserves credit for getting the ball rolling on the BEAD Program. We hope that NTIA and states that participate in the program will be successful in timely, accurately, and efficiently funding the construction of broadband Internet networks that will finally reach Americans who are truly unserved by broadband services.  

 

At the same time, certain aspects of NTIA's Notice raise some concerns. Although the Notice does indicate that Eligible Entities shall prioritize unserved locations when scoring and awarding funding for last-mile deployment projects, much of the Notice gives the appearance of putting unserved and underserved locations on equal footing. The BEAD Program will fail in its essential purpose if Americans are still left unserved by broadband services after the $42.5 billion allocated for the program is spent. Going forward, it will be important for NTIA to emphasize that unserved locations are to be given first priority for receiving grant awards for broadband deployment. And states awarding grants should be responsible for ensuring that every last unserved location within their jurisdiction gets connected to broadband. Otherwise, BEAD Program dollars may end up going to so-called "underserved" locations wherein most Americans already have access to broadband Internet services with 80 Mbps download speeds. 

 

And while it is good that NTIA's Notice does not impose "open access" or "net neutrality" regulatory conditions on the awarding of funds by states under the BEAD Program, the Notice includes a misguided recommendation that states ought to favor open access wholesale last-mile broadband services in setting their criteria for awarding grants. Open access requirements do not and would not help unserved Americans gain access to broadband. It is essential that states keep focused on connecting the truly unserved and not bog down the process or the program's ultimate success by pursuing open access requirements. 

Study Shows No Redlining in Urban Areas

 A new study released by NCTA - The Internet and Television Association Cable shows that gigabit offerings are widely available in urban areas regardless of income. And in another key finding, the study shows that there is also virtually no difference in availability based on race or ethnicity in urban areas.

The findings in the study appear to refute the frequent conjecture that low-income residents, and minority residents, are subject to "redlining" practices that result in less high-quality services available to them.

Comcast’s Latest Internet Essentials Expansion Includes Pell Grant Recipients

Yesterday, Comcast expanded its “Internet Essentials” program to cover Pell Grant recipients. Comcast will also donate $15 million worth of Internet service and devices, including 25,000 laptops.

These actions are the latest developments in Comcast’s long-standing pledge to connect more Americans. Internet Essentials is Comcast’s decade-old program for boosting high-speed Internet adoption among low-income persons, veterans, and seniors. Eligible subscribers get affordable home broadband up to 50/5 mbps for $9.95 per month. The program has had great success in narrowing the digital divide.

Free State Foundation scholars have previously shared news regarding Internet Essentials 10-Year Progress Report. This report highlighted the success of Internet Essentials and need for continuing its mission. Over the past 10 years, Comcast’s $700 million investment in Internet Essentials connected 10 million Americans to high-speed broadband. During that time, Internet Essentials was responsible for 40% of new Internet subscriptions by low-income families with school-aged children. And also in that report, Comcast committed another $1 billion to connect 50 million Americans over the next decade.

Expanding Internet Essentials to the roughly 7 million annual Pell Grant recipients will contribute to meeting this goal. The COVID-19 pandemic made many Americans deeply familiar with how critical connectivity is to achieving a quality education. And changes to learning methods such as hybrid classrooms will make affordability and adoption efforts more important than ever for education.

Free State Foundation scholars support private initiatives by our nation’s broadband providers to boost adoption and close the digital divide. Internet Essentials is such a successful initiative. Senior Fellow Seth Cooper highlighted the 10-Year Progress Report back in March. Senior Fellow Andrew Long covered expansions to the program in February. And Free State Foundation President Randolph J. May featured earlier Internet Essentials expansions in 2020, 2019, 2018, and 2017.

The latest announcement from Comcast is timely and welcome.

Twitter Thread on the Infrastructure Bill and Broadband Access

Congress is currently hammering out an infrastructure bill that includes a section on broadband. The following Twitter thread from July 23 that provides a response to the broadband section of a recent draft bill that was produced in the course of Congress's ongoing negotiations:

(2) Unfortunately, it appears the latest iteration of the infrastructure bill is more focused on expanding federal regulatory power and control over broadband service rates than on expanding Americans’ access to broadband service.

— Seth Cooper (@CooperFSF) July 23, 2021

(4) The infrastructure bill, part of ongoing negotiating to reach compromise, contains a broadband section that appears to compromise itself. Its regulatory control approach will undermine efforts to expand broadband access. Congress should go back to the drawing board.

— Seth Cooper (@CooperFSF) July 23, 2021

Broadband Organizations Join Together to Form America's Broadband Future

On May 14, seven broadband providers and trade associations announced the formation of America's Broadband Future, a coalition that "will urge lawmakers to bridge the digital divide by expanding access in rural America, equipping vulnerable communities with resources needed to get connected, and investing in digital literacy initiatives to empower all Americans to thrive in the digital age."

On its home page, America's Broadband Future asserts that:

Unfortunately, some of the broadband policy plans being discussed in Washington, D.C. fall short. They fail to provide the resources necessary to empower and enable vulnerable communities to get connected quickly. And they fail to prioritize those unserved areas of the country that are most in need of major broadband investment. 

Free State Foundation scholars have addressed various shortcomings of the broadband-specific provisions in President Biden's American Jobs Plan in the following Perspectives from FSF Scholars and blog post:

• "Biden Broadband Plan Favoring Government-Owned Networks Lacks a Constitutional Foundation"
• "Biden Broadband Plan: Claims That Broadband Is 'Too Expensive' Are Unfounded"
• "Biden Broadband Plan: Misdirected Broadband Subsidies Hurt Competition and Consumers"
• "'Future Proofing' Subsidized Broadband Would Inflate Consumer Prices"

The founding members of America's Broadband Future are AT&T, Charter Communications, Comcast, Verizon, CTIA, NCTA – The Internet & Television Association, and USTelecom.

Republican Senators' $568B Infrastructure Proposal Includes $65B for Broadband

A group of five Republican Senators has released a $568 billion infrastructure framework in response the $2 trillion American Jobs Plan announced by President Biden.

Those lawmakers are Roger Wicker (MS), Ranking Member of the Commerce, Science, and Transportation Committee; Shelley Moore Capito (WV), Ranking Member of the Environment and Public Works Committee; Pat Toomey (PA), Ranking Member of the Banking, Housing, and Urban Affairs Committee; Mike Crapo (ID), Ranking Member of the Finance Committee; and John Barrasso (WY), Ranking Member of the Energy and Natural Resources Committee.

The Biden Plan, one aspect of which I discussed in a recent post to the FSF Blog, would make $100 billion available for broadband-related projects and would "prioritize[] support for broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives."

The Republican counter-proposal, by contrast, would allocate $65 billion out of the $81 billion generated by the recent C-band auction for new spending by the FCC and NTIA.

Be on the lookout in the coming days and weeks for additional commentary from Free State Foundation scholars on broadband spending proposals.

AT&T Will Invest $2 Billion to Reach Low-Income and Rural Americans with Broadband

Today, AT&T announced that it will invest $2 billion over the next three years to reach American who lack access to broadband Internet services or who have difficulty affording it. AT&T deserves credit for stepping up and pledging significant amounts of money to make broadband Internet services more available as well as affordable to low-income Americans.

As part of its continuing initiative to close digital divides, A&T will continue to offer discount wireless services to over 135,000 public and private schools and universities. Additionally, AT&T will continue its Access from AT&T program that offers wireline Internet service at $10 or less per month for qualifying households, with no contract obligations or install fee. 

Also, the Federal Emergency Broadband Benefit (EBB) program administered by the FCC will allow over 30 million households to reduce their monthly broadband service bills to as low as zero with. EBB will subsidize qualifying households up to $50 per month or $75 per month on Tribal lands. 

 

For more on AT&T's $2 billion investment pledge and other ways it intends to bring broadband Internet services to more Americans, check out AT&T's press release.

"Future Proofing" Subsidized Broadband Would Inflate Consumer Prices

The Biden Administration's American Jobs Plan (the Plan) would allocate a substantial amount of taxpayer money – $100 billion – to address broadband accessibility and affordability. The limited details we know at this point, however, suggest strongly that the overly ambitious Plan could lead to waste and, contrary to its stated goal, higher, not lower, prices.

There is much to critique about the Plan, but for now I want to limit my focus on the inescapable tension that exists between two of its primary priorities. The Fact Sheet released by the White House makes the following interrelated assertions:

• "The President's plan prioritizes building 'future proof' broadband infrastructure …."
• "Americans pay too much for the internet – much more than people in many other countries – and the President is committed to working with Congress to find a solution to reduce internet prices for all Americans, …."

Simply put, you can't have it both ways. The notion of "future proofing" suggests building "gold-plated" infrastructure that delivers more than what consumers need – and costs more than what they want to spend. And price regulation, the process hinted at in the second quote above and by which the government would dictate how much providers may charge, based upon its best educated guess as to what actual costs and an acceptable rate of return might be, wouldn't eliminate that problem – it simply would incorporate those additional costs into the calculation.

At this point, we cannot know with any certainty what the White House means when it says it wants to "'future proof' broadband infrastructure." However, press reports emphasize that the Accessible, Affordable Internet for All Act would appropriate $80 billion for infrastructure delivering gigabit speeds both upstream and downstream and the Leading Infrastructure for Tomorrow’s America (LIFT America) Act "would raise the FCC's current threshold definition of served areas from 25 Mbps download and 3 Mbps upload minimum to 25/25 symmetrical speed for low-tier service and 100/100 Mbps symmetrical for mid-tier service."

As Former FCC Commissioner Michael O'Rielly stated during recent testimony to the House Energy and Commerce Committee, "the push for symmetrical speeds at exorbitant levels, such as 100/100 megabits per second (Mbps), makes little sense" and "[a] 100-megabit upload speed does not reflect reality for now or any time soon."

And as Joan Marsh, AT&T Executive President of Federal Regulatory Relations, explained in a March 26, 2021, blog post, while 5G networks "easily" can deliver 100 Mbps downloads, "wireless networks are not built to deliver symmetrical speeds" and "adopting a symmetrical standard could result in overbuilding existing services today, including existing asymmetrical services that are currently meeting modern connectivity needs."

The private sector has spent nearly $2 trillion to provide broadband wherever it is economically feasible: that is, where – despite substantial uncertainty – there is at least a reasonable expectation of a return on that investment. Providers rely upon a range of technologies to connect homes: fiber to the home (FTTH), DOCSIS® cable modem service over hybrid fiber-coaxial (HFC) networks, Digital Subscriber Line (DSL) offerings over twisted-copper pairs, 4G/LTE and 5G mobile broadband, fixed wireless operating in both licensed and unlicensed spectrum, and satellite. In some instances, the chosen modality is suited best to the specific geographic and population characteristics of the area to be served. In others, enterprising businesses are rolling the dice – and taking the risk – on a competitive alternative.

The FCC's current definition of "broadband" – 25/3 Mbps – is sufficiently broad to encompass this wide range of network technologies. It also responds to the throughput needs of consumers, fosters intermodal competition, and maximizes the number of eligible bidders in reverse auctions for receipt of government subsidies, such as the $20.4 billion Rural Digital Opportunity Fund and the $9 billion 5G Fund for Rural America – two existing programs whose impact on closing remaining digital divides is not yet known, as Commissioner Brendan Carr emphasized in a recent op-ed.

In sum, the threshold established by the expert agency unleashes the most efficient investment and innovation mechanism – competitive forces – to drive down prices, expand access, and provide the speeds that consumers demand.

By contrast, in the name of "future proofing," the Plan would ratchet up the definition of "broadband" in a way that would increase inappropriately the costs of connecting unserved areas, incentivize providers able to meet that definition to replace existing facilities with "gold-plated" infrastructure rather than focus on expanding the reach of their networks, and render many viable distribution technologies ineligible to receive government subsidies simply due to their inability to deliver upstream speeds far exceeding the needs of consumers both today and in the foreseeable future.

The resulting wasteful overinvestment and suppression of competition would drive prices up, not down. And the specter of price regulation is no panacea. To the contrary, it would incorporate those additional costs into the government-established price – while at the same time serving to disincentivize investment and innovation.

Emergency Broadband Benefit Program Should Help Americans Using Smartphones

Smartphones with 4G and 5G capabilities provide users the same essential Internet connectivity functions as tablet devices. And smartphones are extraordinarily popular for accessing the Internet – especially for low-income households, for younger Americans, and for education-related uses. The FCC ought to treat smartphones as eligible connected devices for the Emergency Broadband Benefit (EBB) program. 

The Commission is now preparing rules to implement EBB program, which will enable eligible households to receive broadband Internet services and connected devices at discounted prices. The EBB program is intended to help out Americans who have been hit hard by the COVID-19 pandemic and lockdowns. Under the EBB program, broadband providers who provide Internet access and connected devices to eligible households can receive reimbursements from a $3.2 billion fund established by Congress. Section 904 of the Consolidated Appropriations Act of 2021 authorized the Commission to implement the EBB program. 

 

Apparently, there has been some question within the Commission about whether smartphones provided to eligible households should be considered "connected devices" for purposes of discount reimbursements under the Act. According to Section 904(a)(4) of the Act, a "connected device" means "a laptop or desktop computer or a tablet." The Act provides no further guidance regarding the meaning of those terms. But the Commission has discretionary authority to interpret the term "tablet" to include "smartphone." 

 

In its 2020 Communications Marketplace Report, the Commission cited 2019 estimates that over 106 million households have smartphones – of which nearly 93 million households subscribe to mobile data plans. It cites surveys indicating smartphone population penetration rates of 80% to 85% at the in 2017 and 2018 – a number that surely is higher in early 2021. The report also cited a 2019 survey indicating that smartphone-only Internet users are particularly popular among lower-income households, and especially for young people and for educational uses:

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In addition to being widely used for accessing the Internet, there is no meaningful distinction between smartphones and tablets regarding broadband-related capabilities. Both are portable and both feature the same or similar apps as well as voice, HD-or-better video, and high-speed Internet connectivity. At the very least, the Commission has discretion to interpret the Act's term for "associated equipment" to include smartphones. Indeed, many Americans use smartphones as hotspots in order to connect laptops and tablets to the Internet. 

 

By making smartphones eligible devices for EBB reimbursements, the Commission can help ensure that the program serves its purpose in helping Americans in difficult circumstances access school work, apply for jobs, receive telehealth services, and engage in other important life activities. In fact, smartphone inclusion in the EBB program could give a boost to those Americans who now are the most in need.