Universal Broadband

[Commentary] How much is being lost in economic benefits because fixed broadband connectivity is not ubiquitous? A 2017 study by Ohio State University Swank Program on Rural-Urban Policy estimated the economic benefits of providing broadband access to unserved households in Ohio. To calculate these estimates, the Ohio State study used customer surplus – what a consumer is willing to pay for a service compared to what they are actually paying. In other words, consumer surplus is the average amount of value a consumer receives from Internet service above and beyond the price.

The most conservative of scenarios, which assumes full access but only 20 percent adoption, would generate an impact of $4.5 billion per year or $43.8 billion over fifteen years in the US. In non-metropolitan counties, this same scenario would yield $2.3 billion annually or $22.7 billion over fifteen years.

[Dr. Roberto Gallardo is Assistant Director & Community & Regional Economics Specialist of the Purdue Center for Regional Development at Purdue University.
Dr. Mark Rembert is the Graduate Research Associate at the Swank Program on Rural-Urban Policy at the Ohio State University.]

At the federal level, four bills relating to widespread broadband have been introduced. Take the Rural Broadband Deployment and Streamlining Act (S 1363), introduced by Sens Joe Manchin (D-WV) and Dean Heller (R-NV). It is meant to bolster the expansion of broadband infrastructure on federally owned land. If successful, the bill would also require a streamlined federal application process for expediting broadband deployment.

The most recent legislation was introduced on Aug 1. The bipartisan Advancing Innovation and Reinvigorating Widespread Access to Viable Electromagnetic Spectrum (AIRWAVES) bill (S 1682), was introduced by Sens Cory Gardner (R-CO) and Maggie Hassan (D-NH). The legislation aims to drive down wireless costs by opening commercially licensed and unlicensed spectrum space, while hopefully bettering broadband access in rural areas. In a similar spirit, the Rural Reasonable and Comparable Wireless Access Act of 2017 (HR 2903) would direct the Federal Communications Commission to develop a national standard for “reasonably comparable” broadband services in rural and urban areas. Since the bill’s introduction in mid-June, however, it has not progressed in the House. Also in mid-June, Reps Doug Collins (R-GA) introduced legislation that would provide tax incentives for companies willing to build out rural broadband services. The so-called Gigabit Opportunity Act (HR 2870) would effectively allow companies to front load the expensing of investments in rural networks within applicable zones. FCC Chairman Ajit Pai lauded the bill, which has not progressed since its June 16 introduction. And in March, Sens Orrin Hatch (R-UT), Steve Daines (R-MT), and Deb Fischer (R-NE) introduced legislation that would streamline broadband permitting in existing highway rights-of-way for broadband infrastructure projects. Called the Highway Rights-of-Way Permitting Efficiency Act of 2017 (S 604), the bill seeks to avoid duplicative federal permitting and regulations and other issues that cause project delays and cost-overruns.

[Commentary] Broadband infrastructure can help plug some of the leaks in rural healthcare services. The result can be better healthcare access and an improved local economy. Arrowhead Electric Cooperative built a fiber network in Cook County (MN) a few years ago. “Our main healthcare facilities send patients home with medic alert-type devices and even tablets to monitor recovery and ensure communication thanks to fiber to home,” says Yusef Orest, head of membership services for the co-op. “Before the network, individuals had internet access but it wasn’t fast. Now, hospitals are increasing services at patients’ home and on-site. For example, they can perform ultrasounds and radiology scans and send results instantly to bigger hospitals for analysis.”

Rural communities can learn from small towns – some in metropolitan areas and some in less populated regions – that have made it their missions to use broadband to transform the nature of healthcare and telemedicine.

[Craig Settles is a broadband industry analyst and consultant to local governments.]

The Federal Communications Commission took the next step toward launching an auction that will provide nearly $2 billion over ten years to expand high-speed Internet access to consumers and businesses in rural areas that are currently unserved by fixed broadband. This proceeding represents the first use of an auction by the FCC to allocate ongoing Connect America Fund support for fixed broadband and voice services in rural areas.

Use of this market-based “reverse auction” mechanism will enable the FCC to expand and support high-quality rural fixed broadband and voice services at a lower cost and to maximize the value of its investment. The auction will commence in 2018. The Public Notice seeks comment on the proposed application and bidding procedures for the auction, including how interested parties can qualify to participate in the auction, how bidders will submit their bids, and how the FCC will process bids to determine the winners and support amounts. This first-of-its-kind auction of support for fixed broadband and voice service is expected to attract parties that have never participated in an FCC auction. Recognizing that, the FCC’s Rural Broadband Auctions Task Force, along with the Wireline Competition Bureau and Wireless Telecommunications Bureau, plan to provide detailed educational materials and hands-on practice opportunities in advance of the auction.

The Federal Communications Commission is exploring ways to improve the quality, accuracy, and usefulness of the data it collects on fixed and mobile voice and broadband service. At the same time, the FCC is examining how it can reduce burdens on industry by eliminating unnecessary or onerous data filing requirements. A Further Notice of Proposed Rulemaking seeks comment on proposals to accomplish both these goals as part of the FCC’s ongoing efforts to improve the value of the data it collects.

The Federal Communications Commission established the procedures for a robust challenge process to ensure that the FCC targets Mobility Fund Phase II (MF-II) support to primarily rural areas that lack unsubsidized 4G LTE service. Establishing the challenge process will enable the FCC to resolve eligible area disputes quickly and expeditiously.

In February, the FCC established the framework for the MF-II, $4.53 billion of funding over ten years, and sought comment on the process under which interested parties could challenge the eligibility of areas for MF-II support. This action establishes a challenge process that will be administratively efficient and fiscally responsible. This item adopts parameters for a one-time collection of 4G LTE coverage data tailored to MF-II. The FCC will use this coverage data, in conjunction with subsidy data, to establish the map of presumptively eligible areas. Interested parties will have a window after the release of this map to file challenges to areas deemed presumptively ineligible, and providers will have an opportunity to respond to those challenges. This item also includes an Order on Reconsideration, which resolves certain issues raised in petitions for reconsideration of the Mobility Fund II Report and Order adopted in February.

Lack of access to fast internet is typically thought of as a rural problem, but many of the country’s urban areas make a poor showing in the share of adults with access to fast home internet.

The Bronx has only 35.3 percent access, and Manhattan fares only slightly better with 35.6 percent access; Clark County, Nevada, home to Las Vegas, has 39.1 percent access. While rural residents’ access might be hindered by their remote location, city residents who don’t have broadband often lack it because of income disparity and a dearth of basic knowledge about the internet and computers. Many urban residents, particularly older ones, haven’t been exposed to the internet or computers much in their lifetime. And without that knowledge and exposure, a person is likely to be further marginalized in economic and educational opportunities, caught in a cycle of literal and metaphorical disconnection.

Many police officers, firefighters and paramedics carry their own smartphones to do the things their department-issued equipment can’t. But now, 16 years after the terrorist attacks of Sept. 11, 2001, exposed the inability of American first responders to talk to each other, a nationwide cellular network called “FirstNet” is launching to give public safety employees the ability to send data, video and text to each other.

When a crisis hits and cell towers are overwhelmed, calls from first responders will preempt calls made by the public. FirstNet is expected to be operational by March. Congress established the First Responder Network Authority after reports that firefighters and police officers were unable to communicate at the World Trade Center and the Pentagon after the Sept. 11 attacks. But the idea of placing all public safety agencies on one interoperable broadband network took off after AT&T was awarded wireless spectrum that will provide the bandwidth for the project and then committed to spending $40 billion to build new facilities and provide security for it. Each state, territory and the District of Columbia must opt in to the project individually so that their public service agencies can obtain the phones or sim cards and wireless plans needed to access FirstNet.

Bringing high-speed internet access to more of rural America is a policy goal that’s popular among Republicans and Democrats alike. But the issue isn’t moving very fast on Capitol Hill. Lawmakers from both parties, along with President Donald Trump, want to include rural broadband provisions in a larger infrastructure bill, a move that would benefit smaller wireless providers such as United States Cellular Corp. and C Spire Wireless as well as equipment companies. But infrastructure has taken a back seat so far to health-care and tax legislation in the 115th Congress. It’s unclear, at best, whether any infrastructure legislation will advance in 2017.

For now, all of the action on rural broadband is at the Federal Communications Commission, where Chairman Ajit Pai has made the issue a top priority. The commission plans to vote Aug. 3 on several related initiatives. Despite the commission’s focus, however, small and rural wireless providers worry that the agency will be slow or insufficient in serving the areas that need broadband most.

As the next installment of a decades-long series of data collections, the National Telecommunications and Information Administration (NTIA) proposes to add 66 questions to the Census Bureau’s November 2017 Current Population Survey (CPS) to gather reliable data on computer and broadband (also known as highspeed Internet) use by US households. To aid the Administration’s plan to incorporate broadband in the upcoming infrastructure initiative and ensure the digital preparedness of the nation’s current and future workforce, NTIA data will reveal consumers’ changing demand for broadband, as well as their online activities.

The information may inform decisions about the scope and scale of the needed infrastructure, particularly in remote and sparsely populated areas where broadband deployment may be difficult and costly. It may also shed light on opportunities to increase digital literacy and use among Americans who currently use the Internet sparingly, if at all.

Written comments and recommendations for the proposed information collection should be sent within 30 days OIRA_Submission@omb.eop.gov