Rural Broadband Takes Center Stage During Tech Week

Submitted on June 23, 2017

You’re reading the Benton Foundation’s Weekly Round-up, a recap of the biggest (or most overlooked) telecommunications stories of the week. The round-up is delivered via e-mail each Friday; to get your own copy, subscribe at www.benton.org/user/register

Round-Up for the Week of June 19-23, 2017

Bringing broadband to unserved areas seemed to be on many minds this week, but no easy solutions were offered

This week, the White House hosted a series of meetings, dubbed “Tech Week”, between leaders of the technology sector and Trump administration officials. Broadband was a key topic there, although discussions about getting everyone access to high-speed Internet service were held outside the White House, too – in Iowa, at Congress, and at the Department of Commerce. The discussions revealed how hard it is to get a handle on the rural broadband divide, and the complexity of bridging it.

President Trump's Rural Broadband Commitment

On June 21, President Donald Trump travelled to Cedar Rapids, Iowa, to speak about agricultural innovation. There he said

We must also ensure that these students have the broadband Internet access they need in order to succeed and thrive in this new and very modern and very changed economy and world. That is why I will be including a provision in our infrastructure proposal -- $1 trillion proposal -- you'll be seeing it very shortly -- to promote and foster enhanced broadband access for rural America also. (Applause.) We know that Wall Street wants it very badly, but you know what else? The farmers also want it. And you're going to have it.

We have to make sure American farmers and their families, wherever they may be, wherever they may go, have the infrastructure projects that they need to compete and grow. And I mean grow against world competition, because that's who you're up against now.

Secretary of Agriculture Sonny Perdue, who accompanied President Trump to Iowa, was asked if he would like to see more federal spending to bring broadband to rural areas. He answered

I think government will have to help, whether it's local government, states government, or the federal government. But we want partnerships. We want people that have skin in the game. These are going to be revenue streams coming in. People are going to pay for these services, but we've got to help ignite that and kick-start that in order to make sure it gets where it need to be.

But Sec Perdue cautioned that there will not be a national plan for broadband because "each area is different." He said USDA's department of Rural Development will work with the Federal Communications Commission in order to make "rural broadband as ubiquitous as we can."

President Trump's Commitment to Emerging Technologies

On June 22, the White House Office of Science and Technology Policy hosted more than two dozen leaders of tech companies and venture capital firms. Deputy US Chief Technology Officer Michael Kratsios described it as a chance to "bring together emerging tech innovators with policymakers to talk about how America can maintain its leadership in creating and fostering entirely new technologies that will drive our economic growth." The agenda included the Internet of Things and the 5G wireless infrastructure necessary to support its development.

The session on 5G was led by Federal Communications Commission Chairman Ajit Pai. The session included AT&T CEO Randall Stephenson, Sprint CEO Marcelo Claure, Verizon Executive Vice President John Stratton, and T-Mobile’s COO Mike Sievert and CTO Neville Ray. Chairman Pai characterized it as an "excellent conversation."

Writing in the New Hampshire Union Leader, Chairman Pai said “government at all levels must focus on removing barriers to innovation and ensuring that technological advances aren’t strangled by bureaucratic red tape.” Concerning 5G he wrote

we’ll need much more infrastructure than what today’s networks demand. 5G will require companies to deploy hundreds of thousands of small cells (operating at lower power), and many more miles of fiber to carry all of the traffic. That’s why the FCC is working on modernizing the rules for that kind of infrastructure. We shouldn’t apply burdensome rules designed for 100-foot towers to small cells the size of a pizza box. If America is to lead the world in 5G, we need to modernize our regulations so that infrastructure can be deployed promptly and at scale.

At the White House meeting, President Trump said, "My administration has been laser-focused on removing the government barriers to job growth and prosperity. We formed a deregulation taskforce inside every agency to find and eliminate wasteful, intrusive, and job-killing regulations, of which we've had many. We want our innovators to dream big."

After a 5G demo, President Trump suggested that Gary Cohn, his chief economic adviser, "write a very strong letter of recommendation" to U.S. cities advocating an easing of permitting for mobile cell installations.

For the executives at the meeting, the audience of President Trump and Chairman Pai offered an opportunity to continue nudging the U.S. government to cut back on restrictions that make it difficult for AT&T and other telecom giants to grow their footprint and deploy the new technologies, such as 5G wireless. Marcelo Claure, the chief executive of Sprint, said that he and others in his industry had emphasized to President Trump that the government must help them deploy new tools like small cells — essentially, mini cell towers that improve wireless connectivity.

“It takes one year to get a permit, but it takes one hour to install it,” said Claure, whose company has embarked on a nationwide campaign to deploy such devices. “We heard him say loud and clear we have to fix this.”

Congress Examines Challenges of Rural Broadband Deployment

Both houses of Congress examined broadband infrastructure challenges this week. Two hearings highlighted the challenges of both properly measuring the broadband deployment deficiencies in rural America – and ensuring broadband services will be deployed there.

Senate Communications Subcommittee Hearing: The Role of the FCC's Universal Service Fund

On June 20, the Senate Subcommittee on Communications, Technology, Innovation, and the Internet – chaired by Sen Roger Wicker (R-MS) – examined the FCC’s Universal Service Fund (USF) and its capabilities for the deployment of broadband in rural America. The hearing offered rural stakeholders the chance to urge the Senate to address a funding shortfall in the USF estimated at approximately $210 million annually.

In 2011, the FCC transitioned the USF program to focus more heavily on broadband. Small rural carriers had the option of receiving support based on a cost model or remaining on the traditional high-cost program, which bases support on embedded costs. The USF funding shortfall occurred when more carriers than anticipated chose the cost model option, resulting in a $160 million annual funding shortfall. The FCC subsequently freed up an additional $50 million annually for that program, and addressed the remaining $110 million shortfall by delaying or reducing carriers’ broadband buildout requirements.

Carriers remaining on the traditional high-cost program also face a funding shortfall, which rural telecom lobbying group NTCA estimates at $100 million annually. Carriers in that program also are subject to additional funding cuts moving forward

In his opening remarks, Chairman Wicker noted that despite the FCC's 2011 USF reforms, challenges remain with USF’s “ability to support meaningful investments into broadband deployment and conduct necessary maintenance on established networks. As a result, this has left a disparity in quality communications service between urban and rural areas.”

Chairman Wicker also noted inadequate data collection methods have led to “an inefficient distribution of funds to truly underserved and unserved areas.” He cosponsored legislation, the Rural Wireless Access Act (S. 1104), that would require the FCC to establish a consistent methodology for its collection of coverage data about the available speed tiers and performance characteristics of commercial mobile and data service for USF. A companion bill (H.R. 1546) awaits action in the House Subcommittee on Communications and Technology.

Chairman Wicker also announced that he and Subcommittee Ranking Member Brian Schatz (D-HI) will reintroduce the “Reaching Underserved Rural Areas to Lead on Telehealth Act” which would qualify several healthcare providers that offer service predominantly to rural areas for support under USF’s rural healthcare program. Wicker’s home state of Mississippi is adopting telemedicine and using innovative technologies to improve the quality, accessibility, and affordability of care. Robust broadband connections, supported through USF, are vital to the adoption of telemedicine.

The subcommittee heard testimony from:

Michael Balhoff, CFA, Senior Partner, Charlesmead Advisors, LLC: In his testimony, Balhoff stressed that the USF is underfunded to support networks and services required in rural regions – especially regions served by smaller carriers. He went on to restate the FCC’s own finding that more than 83 percent of Americans who lack broadband service live in areas served by Bell Operating Companies (AT&T, Verizon, etc) and other large and mid-sized carriers. He blamed this on the strategic focus of the large carriers on “more urban, more wireless, more enterprise, and more international opportunities that provide superior opportunity for growth.” Balhoff concluded that solutions involve 1) creating appropriate incentives for large carriers to divest underinvested and non-strategic properties to smaller carriers and 2) requiring buyers to invest at levels that assure broadband services at levels that are comparable to those in urban areas.

Shirley Bloomfield, Chief Executive Officer, NTCA - The Rural Broadband Association: She offered a couple of short-term solutions for the underfunded USF: 1) the FCC could use USF reserves to provide additional funding for rural areas and 2) Congress could direct infrastructure funding toward supplementing of (or at least for use in coordination with) the USF program. But Bloomfield said any long-term solution depends on reforming who contributes to the USF. Currently, only landline, long distance consumers contribute and that method is unsustainable given the shinking pool of contributors.

Eric Graham, Senior Vice President, Strategic Relations, C Spire also offered possible solution. He suggested making a special USF appropriation in each of the next five years, targeted to rural infrastructure, and with accountability protections. Projects could be funded as soon as the FCC accurately determines the areas that are most in need. Alternatively, Congress could implement a fix to the contribution mechanism to spread the cost of universal service more equitably.

Karen Rheuban, Medical Director for the Office of Telemedicine; Director for the Center for Telehealth at the University of Virginia spoke to the significant barriers to broader integration of telemedicine services into everyday healthcare. She pointed to additional funding for and reform of the FCC’s Rural Healthcare Program.

House Communications Subcommittee Hearing: Defining, Measuring and Mapping Broadband

On June 21, the House Subcommittee on Communications and Technology, chaired by Rep Marsha Blackburn (R-TN), held a hearing entitled Defining and Mapping Broadband Coverage in America. The hearing examined 1) the definition of what constitutes broadband service, 2) collection of data on service levels across the country, and 3) an aggregation of that data in a nationwide coverage map – all three elements are important considerations for identifying the areas most in need of government broadband subsidies.

In early 2015, the FCC adopted new benchmarks for broadband service – moving from a download speed of 4 Mbps and upload speed of 1 Mbps (4/1) to 25 Mbps up and 3 Mbps down (25/3). Chairman Blackburn called that a "dramatic shift"; at the time, the FCC called it an aspirational definition for what would soon be table stakes for delivering the amount of data, particularly video, consumers were hungering for. But raising that definition also reduced the number of folks defined as getting high-speed broadband, Chairman Blackburn pointed out. She argued a variety of speeds serve a variety of purposes and, while there is increasing demand for higher speeds, "we should examine whether a 'totality of circumstances' test might be more appropriate for defining broadband connectivity." She said accurate definitions and mapping data is imperative so that "hardworking taxpayer money" goes to areas that most need it.

The National Broadband Map was mandated and funded by the American Recovery and Reinvestment Act (ARRA). The ARRA created the State Broadband Initiative (SBI) at the Department of Commerce’s National Telecommunications and Information Administration (NTIA). NTIA awarded $293 million in grants, used in part to assist states in gathering data on the availability, speed, and location of broadband service. Most states opted to create a public-private partnership to generate their state’s map, incorporating their data into the national map, but many have failed to maintain their database since the federal funding ended. So the National Broadband Map has not been updated since June 2014. Now determinations about whether or not an area has broadband service are dependent on data collected in the FCC’s Form 477. But, as highlighted often at the hearing, many think the FCC data is less than reliable since 1) it is submitted by service providers but not audited and 2) the presumption is that a census block is served if at least one address in it has broadband – even though many census blocks – especially ones in rural areas – are very large.

Brent Legg, Vice President of Government Affairs at Connected Nation, testified at the hearing. Connected Nation was the single largest grantee under the SBI program and managed broadband mapping and planning projects across 12 states and 1 territory (spanning 42% of the U.S. landmass). He advocated for Congress to establish a single, independent, third party clearinghouse for broadband data collection and mapping This clearinghouse would have responsibility for carrying out four primary tasks:

Broadband data collection and analysis, working with the provider community through a rigorous non-disclosure agreement framework;
Mapping of broadband availability and speeds, produced from infrastructure and subscriber data submitted by the providers;
Field validation and audits of the maps once they are produced; and
Processing feedback submitted by consumers to ensure continual refinement of the maps.

Local Partnerships

The House subcommittee also heard testimony from Dr. Robert Wack, the president of the Westminster (Maryland) City Council. Faced with inadequate broadband service from commercial providers, Westminster used ARRA funding to create the Westminster Fiber Network, a municipally-owned dark fiber network and the first community wide gigabit fiber network in the Mid-Atlantic region. Westminster uses an innovative Pubic-Private Partnership to light the network and provide services.

Local governments increasingly see before them exciting new opportunities to develop next-generation broadband in their communities—and to reap the many benefits that broadband will deliver to their residents and businesses. The goal of most of these communities is to get optical fiber connections to every home and business. Once the fiber is available, the sky is the limit in terms of offering gigabit speeds today and well into the future.

The Department of Commerce hosted a discussion on universal broadband this week. In Exploring Business Model Options for Broadband Deployment, the National Telecommunications and Information Administration's BroadbandUSA initiative explored how there is no one-size-fits-all approach when it comes to deploying broadband in communities. The discussion highlighted three approaches that network owners have used to achieve their communities connectivity goals. The models include:

Private owned/public supported networks;
Public owned/private enabled networks;
Joint public-private ownership of networks.

As localities evaluate broadband public–private partnerships, they should consider both the opportunities and potential pitfalls, and pay particular attention to three interwoven issues: risk, benefit, and control. These factors are the key considerations not only for state and local governments, but also for private sector network operators and service providers. A successful partnership must align each side’s needs, and will inevitably involve trade-offs within this framework.

You can read more about Westminster and public-private partnership’s in Benton’s The Emerging World of Broadband Public–Private Partnerships

Quick Bits

FCC Announces Tentative Agenda for July Open Meeting (press release)

FCC Explores Spurring High-Speed Internet in Multiple Tenant Buildings (press release)

Supreme Court strikes down sex offender social media ban (Associated Press)

Using Texts as Lures, Government Spyware Targets Mexican Journalists and Their Families (New York Times)

Weekend Reads
Computational Propaganda Worldwide (University of Oxford)
Ensuring A Future for Detecting Internet Disruptions: A Field Survey of the Ecosystem Around Internet Censorship, Disruptions, and Shutdowns (New America)
Amazon-Whole Foods -- Game Changer (The Diffusion Group)
‘Maybe the Worst FCC I’ve Ever Seen’ (Michael Copps)