One of the primary goals in enacting the Telecommunications Act of 1996 was to let anyone enter any communications business—to let any communications business compete in any market against any other firm. Changes in the Universal Service Fund (USF) programs should continue to support and advance this goal by encouraging all telecommunications and broadband service providers to compete for USF support and, especially, to serve low-income households in their service areas.

Creating or perpetuating anticompetitive markets or even monopolies through USF programs is not the goal of Congress, the law, the Federal Communications Commission (FCC), nor the USF programs. As Congress finds in the Infrastructure Investment and Job Act, “In many communities across the country, increased competition among broadband providers has the potential to offer consumers more affordable, high-quality options for broadband service.” The FCC must foster competition to adhere to the principles of Sec 254 of the Communications Act as well as the findings and affordability goals of the Infrastructure Investment and Job Act.

As noted in the Executive Order on Promoting Competition in the American Economy, “In the telecommunications sector, Americans likewise pay too much for broadband, cable television, and other communications services, in part because of a lack of adequate competition.” Low-income households are the most vulnerable to conditions that threaten basic economic liberties, democratic accountability, and the welfare of workers, farmers, small businesses, startups, and consumers. The Telecommunications Act of 1996—and the Universal Service Fund programs created and confirmed by the law—aims to protect conditions of fair competition.

The FCC should 1) police unfair, deceptive, and abusive business practices, 2) resist consolidation and promote competition, 3) promulgate rules that promote competition, including the market entry of new competitors; and 4) promote market transparency through compelled disclosure of information.

Specifically, policymakers should continue to advance Congress’ long-held support for the goals of universal service, and the importance of robust competition in achieving those goals, by encouraging the FCC to advance the following pro-competition policies:

• Prioritize Open-Access Networks that Facilitate Competition Between Multiple Providers: USF programs should give preference in awarding funding to broadband network builders that foster the pro-competition policies embodied in the Telecommunications Act by choosing to provide open-access
• Support Municipal Experimentation: The results of the USF’s E-Rate Modernization program have demonstrated how applicant-owned, self-provisioned networks (i.e. municipally-owned school and library networks) are not only a cost-effective network solution, but it is also consistent with Section 254 of the Telecommunications Act.(1) USF programs should build on this evidence and success by enabling municipalities and counties to experiment with various ways—including public-private partnerships—of increasing broadband deployment.
• Encourage Local Planning: Even applying for USF support requires funding. The FCC should provide the kind of support offered by multiple states, including Illinois, that provide grants and/or technical assistance to eligible municipalities and/or economic development organizations in order to assist in the creation of a local or regional broadband strategy and to underwrite feasibility studies.
• Empower Community Institutions to Act as Launching Pads: The E-Rate program should allow private broadband providers to maximize the reach of USF-enabled investments by extending networks that reach community institutions into nearby neighborhoods.
• Collect and Make Public Machine-Readable Broadband Pricing Data: The FCC should require broadband providers to disclose their residential pricing (with fees and ancillary charges) for each market and the FCC should provide public analyses of competition in local markets.

The Benton Institute welcomed the FCC’s decision expanding competition and increased choice for broadband services for people living and working in apartments, multiunit premises, and other multiple tenant environments (MTEs). USF programs to date have looked predominately at single family housing.  But to close the digital divide we also need to support the 12 million low-income people in the 4.5 million unserved households in multi-family apartments.  Thanks to Congress’s wisdom and foresight, the BEAD Program will prioritize projects that serve multiple tenant environments with a high rate of low-income Americans with free Wi-Fi. States now need to prioritize these urban unserved projects in their broadband plans—but they represent roughly 24 percent of our digital divide. Once this Wi-Fi infrastructure is built out, there will likely be some recurring and reoccurring access costs and minimal maintenance costs that must be sustained.  So, it will be necessary for the FCC to sync its USF support mechanisms with the priorities of the Infrastructure Investment and Job Act.

Notes:

1. The Commission recognized that increasing flexibility and supporting more options for broadband connectivity are consistent with the direction in section 254 of the Act to “enhance, to the extent technically feasible and economically reasonable, access to advanced telecommunications and information services” for schools and libraries.”  https://docs.fcc.gov/public/attachments/DOC-343113A1.pdf 

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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Kevin Taglang
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Benton Institute
for Broadband & Society
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