Wednesday, July 17, 2024
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Impact of the Discontinuation of the Affordable Connectivity Program
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In a meeting with officials at the Federal Communications Commission, Recon Analytics shared results of a survey of 4,000 consumer mobile and 4,000 home internet consumers.
- 89% of Affordable Connectivity Program (ACP) respondents make less than $25K per year, 72% are female, 58% are White
- Spectrum had the greatest proportion of ACP-Eligible households that signed up (31%)
- Prepaid brands had the highest proportion of eligible customers participating in ACP
- Internet and wireless service providers were the leading source of information about ACP
- Over 2/3rds of ACP participants recommended it to somebody else
- Mobile subscribers more likely to cancel their ACP-supported service than those with home broadband
- Awareness and confusion about eligibility criteria lead reasons that households did not sign up
- ACP has been a temporary source of new lines, masking structural weakness in the industry
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Experts expressed concern that federal support for municipal broadband is limited, prompting uncertainty about future funding and operational sustainability. Tyler Cooper, editor-in-chief of Broadband Now, said that Broadband, Equity, Access, and Deployment (BEAD) grants are less promising for municipal broadband deployments despite initial promises. Cooper expressed concern that BEAD rules and requirements may not favor municipal networks, potentially favoring larger providers. The Biden campaign made bold promises to encourage local solutions to the digital divide, “explicitly stating that the community broadband networks would be prioritized,” said Cooper. “One of the major things that they promised was to remove state-level barriers that restrict the development of municipal broadband.” “We have essentially received none of those things,” he concluded.
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This first-of-its-kind kit includes bond forms to address the National Telecommunications and Information Administration (NTIA) announcement to accept surety bonds as an additional form of security in lieu of letters of credit (LOCs) for the Broadband Equity, Access, and Deployment (BEAD) Program. The National Association of Surety Bond Producers (NASBP) and the Surety & Fidelity Association of America (SFAA) formed a surety working group to develop performance bond forms and model language to facilitate the use of surety bonds to meet BEAD Program security requirements. The surety working group developed two performance bond forms, model language for state broadband offices to insert into award agreements, and a sample letter template to confirm for state broadband offices the bond amount for which an internet service provider (ISP) or its construction contractor initially qualifies. Of the two bond forms, one addresses situations when the ISP can qualify for bonding and furnishes the bond directly to the state broadband office. The second bond form addresses situations where the contractor to the ISP building out the broadband system is better suited to qualify for bonding.
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There’s a huge amount of energy in the fiber broadband ecosystem right now driven largely by the Broadband Equity, Access & Deployment (BEAD) program. But as someone who’s covered telecommunications for three decades, I suspect that we’re nearing the peak of the hype cycle for broadband. Telecommunications analyst Doug Dawson recently pointed out that broadband additions are growing by about one million new customers a year—roughly equal to the number of new households expected. “This is down from the two to three million new broadband subscribers added every year since 2017,” he wrote. So, are we at the beginning of the end for broadband in the U.S.? It's anyone's guess. But, one thing I’ve noticed over my years covering telecommunications is that the end of a hype cycle tends to come as a surprise. In this case, I wouldn’t be surprised if in a couple of years the excitement about broadband has waned.
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Many people have criticized the Federal Communications Commission (FCC) for its execution of the Rural Digital Opportunity Fund (RDOF) program, which awarded $6 billion in funding to bring broadband to 3.5 million locations across the country. But many fail to appreciate that state public utility commissions (PUCs) share some responsibility with the FCC in ensuring that these RDOF-funded projects are proceeding as planned. When Congress enacted the landmark legislation that established the $42.5 billion Broadband Equity Access and Deployment (BEAD) program to bring internet to all, it established a framework in which states would be responsible for awarding funding to sub-recipients and monitoring compliance, subject to an overarching national framework. After BEAD awards are announced, it’s inevitable that some key personnel at state broadband offices will move on to new professional opportunities. Let’s hope that states embrace their responsibilities for post-award oversight and maintain the resources necessary to perform that critical role in BEAD.
[Carol Mattey is a former senior official from the Federal Communications Commission, where she led teams working on initiatives to modernize the FCC’s $9 billion Universal Service Fund to support broadband. She currently is the principal of Mattey Consulting LLC, which provides strategic and public policy advisory services to broadband providers and other entities seeking funding for broadband.]
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The state of Texas has begun accepting applications for nearly $730 million in broadband funding. Applications are due by August 26, 2024. Applicants can request funding for any of 24 counties. Funding targets the two neediest counties in each of the state’s 12 economic regions. Network operators winning funding will be required to make service available to all unserved and underserved locations in the county. Awardees will be required to deploy symmetrical gigabit service unless “it would be impractical because of geography, topography, or excessive cost”, in which case symmetrical 100 Mbps capability will be required. Awards will be made by the Texas Broadband Development Office through the state’s Bringing Online Opportunities to Texas (BOOT) II program.
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Linda Hardesty asked, “What if, in ten years, young people don’t subscribe to fixed broadband at all?” Her story is based on a U.K. research group that predicts that within ten years there will be a lot of young people who will never have subscribed to a landline broadband product. Hardesty asks if the same might be true for the U.S. It’s not an obvious answer. Young people in both countries seem to be satisfied with watching videos on the small cellphone screen. However, there are some big fundamental differences between the two markets. One big difference today is that there are cellular carriers in the U.K. that offer unlimited usage cell phone plans. There is nothing like that today in the U.S. Current U.S. cell phone plans are not aimed at satisfying average home broadband usage, and to do so would be a giant shift.
The End of Chevron Deference for Agency Decisions: Potential Implications for Telecommunications Policy
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The Supreme Court in a 6-3 vote overturned the landmark decision in Chevron v. Natural Resources Defense Council, sharply limiting the authority of federal administrative agencies including the Federal Communications Commission (FCC). After the decision in Loper Bright Enterprises v. Raimondo, it will be easier to challenge and overturn agency decisions, and federal agencies will be more hesitant to adopt new regulations absent clear Congressional direction. At the same time, the need for clear Congressional direction means that new legislation will need to spell out the agency’s role in greater detail. The overturning of the Chevron doctrine promises to impact ongoing telecommunications and broadband policy debates, including the regulatory classification of broadband Internet services and the scope of the FCC’s Title II authority. It may also reopen prior regulatory debates on everything from spectrum allocation matters to pole attachment and rights-of-way management decisions.
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TBlair Levin, analyst for New Street Research and former chief of staff at the FCC, discusses the Supreme Court's June 28 decision striking down Chevron deference (a.k.a, the Loper Bright decision), and the implications for the telecommunications industry at large. While some telecommunications industry groups are celebrating the decision, Levin suggests they "should go back and read history." The decision could have an impact on several issues pertinent to broadband policy and closing the digital divide—including the Broadband Equity Access and Deployment (BEAD) Program, the Universal Service Fund (USF), digital discrimination rules, and the FCC's Title II order.
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A significant chunk of the tech industry's money and power is lining up behind Donald Trump. Silicon Valley was once solidly Democratic, with just a handful of Republican outliers. Now its red camp is growing and throwing around its weight. Venture capital billionaires Marc Andreessen and Ben Horowitz each will make donations to Trump's re-election effort. "Techno-optimists" Andreessen and Horowitz are following hot on the heels of Elon Musk's announcement that he would endorse Trump and form a PAC to aid his campaign. Neither Andreessen nor Horowitz is believed to have previously donated to a presidential campaign. The donations are reportedly motivated by areas like crypto and AI regulation, without regard to other issues like abortion or the Supreme Court. In short, they believe Trump will be better for tech startups than will President Joe Biden, who they believe favors entrenched incumbents.
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The politics of Sen JD Vance (R-OH), Donald Trump’s new running mate, might require a lot of explanation if you’re still accustomed to the traditional Democratic/Republican divide — a Yale-educated former venture capitalist and economic nationalist with ties to Catholic integralists and an odd respect for Lina Khan? But for those who have watched the sharply curving arc of Silicon Valley conservatism it’s almost an inevitable convergence. Vance’s politics are an idiosyncratic blend of the heartland populism inspired by his well-known life story and a deeply held contempt for modern liberal institutions, informed in part by his friendship with Paypal mogul Peter Thiel. Those politics largely overlap with a cadre of Silicon Valley futurists who have become increasingly, and vocally, pro-Trump.
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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