Tuesday, May 21, 2024
Headlines Daily Digest
Today's Agenda includes Broadband Infrastructure and Workforce Opportunities, Broadband Deployments in State DOT Rights-of-Way
Don't Miss:
US broadband subscriber pace slows across the board
Digital Divide
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Broadband Funding
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Health
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Ownership
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Artificial Intelligence
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The pace of US broadband subscriber growth slowed considerably in the first quarter of 2024 as fiber, fixed wireless access (FWA) and cable broadband service providers collectively turned in results that were worse than what they posted in the year-ago period. Total industry net additions, including or excluding FWA and geosynchronous (GEO) satellite broadband providers, decelerated noticeably in Q1 2024. The total market's growth rate dropped to just 2.3 percent year-over-year, the slowest since the COVID-19 pandemic, MoffettNathanson estimated in its latest broadband industry trends report. Moffett believes the trend is partly attributable to sluggish housing formation, with Census Bureau data indicating that occupied households in the US contracted by about 311,000 units in Q1 2024. The overall broadband market is also becoming increasingly saturated by the quarter. Moffett believes the likely demise of the Affordable Connectivity Program (ACP) shares in the blame (new enrollments stopped in February), even if it becomes a one-time event that the US broadband industry will have to absorb.
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Lawmakers are butting heads over a provision within the Broadband Equity Access and Deployment (BEAD) program that allows states to require low-cost service options from participating service providers. Democrats are calling it an affordability policy. Republicans say it's heavy-handed government regulation. As part of the BEAD planning process, the National Telecommunications and Information Administration (NTIA) is considering each state’s definition of a low-cost option, provided that it meets the standards laid out in the program’s statute. NTIA has already approved some state BEAD plans that set $1 as the amount for a required low-income service option. In a May 15 hearing focused on the 2025 budget for NTIA, Reps Cathy McMorris Rodgers (R-WA), Bob Latta (R-OH), and Frank Pallone (D-NJ) disagreed on whether or not the low-cost requirement should be considered rate regulation.
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Evan Feinman, director for the Broadband Equity, Access and Deployment (BEAD) program with the National Telecommunications and Information Administration, provided an update on the program. All states have submitted their Volume 1 proposals to NTIA, and Feinman said that nearly all Volume 1 proposals are approved. A check of NTIA’s Progress Dashboard today shows that only Florida, Maryland and Minnesota have yet to have their Volume 1s approved. Feinman said that NTIA is steadily working through Volume 2 proposals, in which states must address 18 requirements that are explained in NTIA’s Notice of Funding Opportunity (NOFO). So far, NTIA has approved eight Volume 2 proposals.
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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. Inflation spiked shortly after the RDOF auction closed, and making it significantly harder for an RDOF winner to build the markets it won in the auction. Another argument that can be made for amnesty is that RDOF was never enough funding to build rural networks. While RDOF wasn’t a grant program, many companies who took the funding treated is as such. Perhaps the best reason to allow RDOF amnesty is that there is a good chance that anybody asking for amnesty might walk away. The immediate issue with RDOF amnesty is the impact it could have on Broadband, Equity, Access, and Deployment (BEAD) grants. It’s completely unfair to states to ask them to toss new locations into the BEAD process at this late date. I believe that at this late stage, the Federal Communications Commission (FCC) needs to own the consequences of ISPs abandoning RDOF. The FCC broke RDOF, and whether they allow amnesty or ISPs just walk away, the FCC needs to be the one to fix the problems caused by RDOF defaults.
Rep Williams Introduces Legislation to Save the Affordable Connectivity Program Share on Facebook Share on Twitter Print this Page Share by Email
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Rep Brandon Williams (R-NY) has introduced a bill to fund the Affordable Connectivity Program (ACP) through Fiscal Year 2024. H.R. 8466, the Affordable Connectivity Program Improvement and Extension Act of 2024, will replenish the Affordable Connectivity Fund with $6 billion by amending Section 521(4)(a) of the Consolidated Appropriations Act, 2024. This creates no additional taxpayer burden and is fully paid for through existing federal funding. This legislation also includes measures to combat fraud, such as requiring eligible households to enroll in the ACP through the National Verifier or National Lifeline Accountability Database. H.R. 8466 would treat all households which are currently enrolled in the ACP as eligible to receive the benefit for 180 days after passage, regardless of future eligibility status.
Rep Buddy Carter optimistic House committees will come to agreement on telehealth extension negotiations
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The House Commerce Committee's Subcommittee on Health voted to pass a two-year Medicare telehealth extension along with other legislation that expands reimbursement for health tech. The sponsor of the telehealth extension bill, Rep Buddy Carter (R-GA), said he sees no obstacles to the telehealth extension passing the full committee, nor any significant issues for the Commerce and Ways and Means Committees to come to an agreement on a two-year telehealth extension. Rep Carter already conceded to the Ways and Means Committee by reducing the scope of the bill from a permanent extension down to two years. Members of Telehealth Access for America, a national education campaign, sent a letter to Congressional leadership urging them to extend pandemic-era telehealth waivers that are set to expire at the end of 2024.
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An appealing way to finance fiber builds is through asset-backed securities (ABS). However, this is only available to established companies that actually have fiber assets, which they can leverage to secure a lower cost of debt. It’s not something available to new entrants in the fiber space. Since the introduction of the Broadband Equity Access and Deployment (BEAD) program, many private equity (PE) investors have entered the fiber market. Some PEs seem to be waiting in the wings to scoop up distressed startups or even established providers. “One of the overarching trends is a hyperlocal approach, making sure the way you’re financing your fiber build is specific to that market. What may work in L.A. may not work in rural Kentucky," Phillip Boness, director of growth and strategies at the professional services firm Jacobs said. One avenue to local connection is through electric cooperatives.
Artificial intelligence (AI) act: Council gives final green light to the first worldwide rules on AI
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The Council of the European Union approved a ground-breaking law aiming to harmonise rules on artificial intelligence, the so-called artificial intelligence act. The flagship legislation follows a ‘risk-based’ approach, which means the higher the risk to cause harm to society, the stricter the rules. It is the first of its kind in the world and can set a global standard for AI regulation. The new law aims to foster the development and uptake of safe and trustworthy AI systems across the EU’s single market by both private and public actors. At the same time, it aims to ensure respect of fundamental rights of EU citizens and stimulate investment and innovation on artificial intelligence in Europe. The AI act applies only to areas within EU law and provides exemptions such as for systems used exclusively for military and defence as well as for research purposes. The new law categorises different types of artificial intelligence according to risk. AI systems presenting only limited risk would be subject to very light transparency obligations, while high-risk AI systems would be authorised, but subject to a set of requirements and obligations to gain access to the EU market. AI systems such as, for example, cognitive behavioural manipulation and social scoring will be banned from the EU because their risk is deemed unacceptable. The law also prohibits the use of AI for predictive policing based on profiling and systems that use biometric data to categorise people according to specific categories such as race, religion, or sexual orientation.
Upcoming Events
May 21—Rural Economic Development Summit: Broadband Infrastructure and Workforce Opportunities (Federal Reserve Bank of Philadelphia)
May 21—Broadband Deployments in State DOT Rights-of-Way (NTIA)
May 22—Legislative Proposal to Sunset Section 230 of the Communications Decency Act (House Commerce Committee)
May 22—What Makes Broadband Champions: Lessons from Michigan (Benton Institute)
May 22—What’s the Deal with Open Access? (Fiber Broadband Association)
May 23—May 2024 Open Federal Communications Commission Meeting (FCC)
Benton (www.benton.org) provides the only free, reliable, and non-partisan daily digest that curates and distributes news related to universal broadband, while connecting communications, democracy, and public interest issues. Posted Monday through Friday, this service provides updates on important industry developments, policy issues, and other related news events. While the summaries are factually accurate, their sometimes informal tone may not always represent the tone of the original articles. Headlines are compiled by Kevin Taglang (headlines AT benton DOT org), Grace Tepper (grace AT benton DOT org), and Zoe Walker (zwalker AT benton DOT org) — we welcome your comments.
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