Doug Dawson

I have been asked my opinion several times about Rural Digital Opportunity Fund (RDOF) amnesty—letting RDOF winners walk away from their obligations without big penalties. There is no easy answer to the question. It’s certainly a timely topic, since we are seeing internet service providers (ISPs) walk away from RDOF. There are several good arguments to be made that favor some kind of amnesty.

Big internet service providers (ISPs) have been using the same arguments against being regulated for the last decade. These arguments were used to justify killing Title II regulation under the Ajit Pai FCC and have been resurrected today to try to get Congress to override the FCC’s decision to reimpose broadband regulation. From my perspective, their arguments have gotten stale and out of touch with the way the market really operates. The big ISP trade associations have been telling the public for years that broadband prices have been falling in ‘real terms’.

As the Federal Communications Commission reinstates Title II regulation, the definition of broadband defines what is and isn’t directly regulated. In the Order that reinstated Title II regulation, the FCC notes that it continues “to define 'broadband Internet access service' as a mass-market retail service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up Internet access service.” It

It’s almost impossible to talk about broadband at the community level without talking about resiliency and redundancy. It’s hard to find rural communities that haven’t experienced a broadband outage due to a fiber being cut somewhere. It’s something that regulators talk about a lot, but there are no national or state plans for broadband resiliency. There are no specific standards related to resiliency for large networks.

Two concrete examples of rapidly growing broadband demand are schools and internet service provider (ISP) backhaul. A decade ago, there was a scramble to get gigabit broadband access to schools. Because of the use of the Federal Communications Commission’s (FCC) E-rate money, a lot of schools across the country got connected to fiber and were able to buy faster broadband. The original goal was to get a gigabit connection to each school, and almost every school in many states met that goal.

The 2nd US Circuit Court of Appeals in Manhattan ruled recently that federal telecommunications law does not stop states from regulating broadband rates. This was in relation to a 2018 law passed by the State of New York that required internet service providers (ISPs) to offer low-income rate plans for as low as $15 per month. ISPs appealed the new law, and a US District Court issued an injunction against the law. The recent ruling overturned that injunction and puts the law back into effect.

 There are several important changes to the broadband industry that came out of our collective pandemic experience.

The National Telecommunications and Information Administration preparing to award over $44 billion to construct rural broadband networks. Almost by definition, these networks will be built in rural areas where it’s hard to justify a business plan where revenues generated from the grant areas are sufficient to fund the ongoing operation and eventual upgrades to any broadband networks.

One of the trends that is a concern for internet service providers (ISPs) is plans by State Broadband Offices to force Broadband Equity, Access and Deployment (BEAD) winners to charge low rates for broadband. One argument for lowering rates is that the government is paying a big portion of the cost of building the broadband networks, and it ought to be able to extract concessions from the ISPs for taking the grant funding. In most places, BEAD will be used for the most sparsely populated places, which in many instances also have the toughest topography and construction challenges.

Federal Communications Commission (FCC) Chairwoman Jessica Rosenworcel made it clear recently that the FCC is not willing to tackle funding for the Affordable Connectivity Program (ACP) that is expiring in May 2024. She estimated that the FCC would have to add something like $9 to every broadband bill in the country to fund the ACP plan. However, states could pick up the ACP funding just for their state. States will have the authority to do this after the FCC approves the reinstitution of Title II authority this week.