April 2016

The Federal Communications Commission (FCC) is an independent federal agency with its five members appointed by the President, subject to confirmation by the Senate. It was established by the Communications Act of 1934 (1934 Act) and is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. The mission of the FCC is to ensure that the American people have available—at reasonable cost and without discrimination—rapid, efficient, nation- and world-wide communication services, whether by radio, television, wire, satellite, or cable. Although the FCC has restructured over the past few years to better reflect the industry, it is still required to adhere to the statutory requirements of its governing legislation, the Communications Act of 1934. The 1934 Act requires the FCC to regulate the various industry sectors differently.

Some policymakers have been critical of the FCC and the manner in which it regulates various sectors of the telecommunications industry—telephone, cable television, radio and television broadcasting, and some aspects of the Internet. These policymakers, including some in Congress, have long called for varying degrees and types of reform to the FCC. Most proposals fall into two categories: (1) procedural changes made within the FCC or through congressional action that would affect the agency’s operations or (2) substantive policy changes requiring congressional action that would affect how the agency regulates different services and industry sectors. For FY2017, the FCC has requested a budget of $358,286,000, all derived from regulatory fees collected by the agency. This request is $25,726,497 less than the FY2016 funding of 384,012,497. Part of the FY2016 budget, $44,168,497, was specifically made available for expenses associated with moving to a new facility or reconfiguring the existing facility space to reduce space consumption and associated budget costs. For FY2017, the FCC requested $16,866,992 for that same purpose.

I’m very grateful, very pleased to see so many ministers of finance, presidents of multilateral development banks, and NGO, others here, because your presence really underscores a fundamental truth, and it’s pretty simple: The Internet is essential to economy prosperity in the 21st century. As President Barack Obama said in 2015, the Internet is not a luxury; it’s a necessity. So when we talk about infrastructure today, we have to include the Internet, right alongside roads and ports and bridges and dams and airports and power grid. And that’s why I want this morning to urge every single one of you who are making decisions about investment and making budget decisions and making decisions about allocation of capital, please think deeply about the long-term contributions that increased connectivity produces. This is really mostly common sense – not even a revelation – but it, nevertheless, takes effort to create a critical mass and to move people. To turn an enormous tanker around, as we know, it takes a while. According to a report that was released by the World Bank, for every 10 percent increase in broadband access, a developing country can see up to 2 percent increase in GDP.

Now, none of this is headline news. But here’s the fact: We are not – we are still not taking full advantage of the – of all of the advantages that connectivity – all the opportunities that connectivity affords. And I want to say to you – and we’re not doing it by a long shot. That’s the irony. Out of every five people in the world, there remain three without internet access in 2016. It’s unacceptable. And in the poorest countries the figure can top 95 percent. With that reality in mind, in 2015, the State Department launched the Global Connect Initiative precisely to bring at least an additional 1.5 billion people online by 2020. And this initiative has three interrelated goals: One, to encourage finance ministers to make Internet access central to all development and growth initiatives. Two, to work in cooperation with multilateral development institutions in order to double public and private lending for connectivity and digital technologies. And three, to harness the knowledge, skills, and resources of the tech community itself to implement solutions for high-speed, affordable broadband access.

As the Federal Communications Commission nears a decision on the proposed merger between Charter Communications, Time Warner Cable and Bright House Networks, digital inclusion advocates in California have negotiated a $32.5 million deal with "New Charter" that could support broadband adoption by hundreds of thousands of low income families in the state. Now the big question is: Will the FCC make the California agreement a model for communities affected by the merger throughout the US?

Under California law, the transfer of cable franchises required for the proposed merger must also be approved by the California Public Utilities Commission (CPUC). The California Emerging Technology Fund (CETF) has led a statewide coalition calling on the CPUC (as well as the FCC) to withhold that approval unless the merged company, calling itself New Charter, agrees to a number of conditions to help overcome the digital exclusion of millions of residents in Los Angeles, San Diego, San Bernardino, Riverside and other affected urban and rural communities. The proposed New Charter plan -- essentially, 30 mbps Internet service with no data caps for $14.99 a month -- would be available to families with children eligible for the Federal school lunch program, as well as customers 65 years of age or more who receive Supplemental Security Income, i.e. very low-income seniors.

This is potentially a very big deal, not just for southern Californians but for the whole country. There have been similar state-level regulatory agreements in the past between community advocates and major Internet carriers (notably in California, which is how CETF got its start). In this case, however, the proposed merger affects tens of millions of households in states other than California, and the terms of its approval by the FCC are apparently still being finalized. Can the FCC ignore New Charter's $32.5 million commitment to digital inclusion in just one state? Or will this deal lead the Federal regulators to put community digital inclusion investment on their negotiating agenda on behalf of all the underserved communities served by Charter, Time Warner and Bright House?

Trade groups representing Internet service providers are asking the Federal Communications Commission to give the public more time to comment on proposed rules governing the way providers handle customer data. The groups — including wireless association CTIA, the Consumer Technology Association and cable group National Cable and Telecommunications Association — said that the issues raised in the proposal are complex enough, and would have a big enough effect on their industry, that more time is needed for them to weigh in.

The Notice [of Proposed Rule-making] proposes to establish sweeping and unprecedented privacy, data security, and data breach rules for broadband Internet access service providers that raise difficult and complex legal, technical, and policy issues with broader implications for the complicated Internet ecosystem and online advertising marketplace,” they said. They also argued it could be hard for smaller providers to weigh in simultaneously on the privacy issue and other proposals before the commission. The American Cable Association, which represents smaller providers, signed on to the filing.