Daily Digest 7/25/2024 (Universal Service Fund)

Benton Institute for Broadband & Society
Table of Contents

Broadband Funding

New court ruling puts Universal Service Fund in hot water  |  Read below  |  Linda Hardesty  |  Fierce
Benton Foundation
Responses to Universal Service Fund Decision  |  Summary at Benton.org  |  Kevin Taglang  |  Benton Institute for Broadband & Society
Biden-Harris Administration Opens Applications for $1 Billion Digital Inclusion Grant Program  |  Read below  |  Press Release  |  National Telecommunications and Information Administration
USTelecom Letter to Commerce Secretary Adresses BEAD Low-Cost Service Requirement  |  Read below  |  Jonathan Spalter, Grant Spellmeyer, Gary Bolton, Shirley Bloomfield  |  Letter  |  USTelecom, ACA Connects, Fiber Broadband Association, NTCA–The Rural Broadband Association

State/Local/Tribal Initiatives

New program offers free high-speed internet access to Osage seniors  |  Read below  |  Sarah Liese  |  KOSU
Maryland leaders work to expand Wi-Fi in West Baltimore  |  Read below  |  Tashi McQueen  |  Afro News
Illinois Broadband Office Seeks Broadband and Digital Equity Policy Analyst  |  Illinois Office of Broadband

Wireless

Senators Urge DOJ and FCC to Closely Scrutinize T-Mobile Acquisition of UScellular  |  Read below  |  Sen Elizabeth Warren (D-MA), Sen Amy Klobuchar (D-MN), Sen Chris Murphy (D-CT), Sen Bernie Sanders (I-VT), Sen Cory Booker (D-NJ), Sen Richard Blumenthal (D-CT)  |  US Senate
Wireless Network Keeping Up with Demand as Customer Problems Decrease, J.D. Power Finds  |  Read below  |  Press Release  |  JD Power
T-Mobile and KKR Launch JV to Acquire Metronet  |  Read below  |  Michael Susin  |  Wall Street Journal

Labor

An Engineer Shortage?  |  Read below  |  Doug Dawson  |  Analysis  |  CCG Consulting

Elections 2024

Evaluation of the U.S. Department of Justice’s Efforts to Coordinate Information Sharing About Foreign Malign Influence Threats to U.S. Elections  |  Read below  |  Analysis  |  Department of Justice
Vice President Kamala Harris hasn’t said a lot about tech policy, but here’s what we know  |  Read below  |  Lauren Feiner, Kylie Robison, Justine Calma, Gaby Del Valle  |  Vox
Where Vice President Kamala Harris stands on tech policy  |  Read below  |  Maria Curi, Ashley Gold  |  Axios
What voters want on AI from Trump  |  Read below  |  Derek Robertson  |  Politico
The billionaire tax proposal that’s driving Silicon Valley to support Trump  |  Vox

Platforms

Senators write bipartisan, bicameral letter to Meta urging continued access to transparency tool CrowdTangle  |  US Senate
OpenAI's Sam Altman | A democratic vision for artificial intelligence must prevail over an authoritarian one  |  Washington Post
Reddit is now blocking major search engines and AI bots—except the ones that pay  |  Vox
Big Tech says AI is booming. Wall Street is starting to see a bubble.  |  Washington Post

Security

Caught in the CrowdStrike Outage? Here’s How to Get Compensated.  |  New York Times

What Marketers Should Know About Google’s ‘Surprising, but Not Shocking’ Cookies About-Face  |  Wall Street Journal

How We Live Now

Our twin crises of despair and misinformation  |  Brookings

Stories From Abroad

The Illicit Flow of Technology to Russia Goes Through Hong Kong  |  New York Times
Apple Under Investigation in Spain Over Treatment of App Store Developers  |  Wall Street Journal
Today's Top Stories

New court ruling puts Universal Service Fund in hot water

Linda Hardesty  |  Fierce

In a ruling that quickly caused shock waves in the U.S. telecommunications industry, the Fifth Circuit Court of Appeals ruled, 9-7, that the Universal Service Fund (USF) is unconstitutional as currently administered. The Court explained its ruling by saying that the USF is a “misbegotten tax” that violates Article I, § 1 of the Constitution, which states that all legislative powers are given to Congress, which is made up of the Senate and the House of Representatives. It said that Congress, via the Telecommunications Act of 1996, delegated its taxing power to the FCC. But then the FCC sub-delegated the taxing power to a private corporation — the Universal Service Administrative Company — to determine how much American citizens would be forced to pay for USF taxes. The seven dissenters to the court’s ruling argued that the USF program collects administrative fees and not taxes and that the court is blurring the distinction between the two. The 6th and 11th Circuits have already ruled the opposite way, upholding the current USF funding mechanism. For this reason, the issue will likely be taken to the Supreme Court.

Biden-Harris Administration Opens Applications for $1 Billion Digital Inclusion Grant Program

The Department of Commerce’s National Telecommunications and Information Administration (NTIA) announced the availability of nearly $1 billion to fund programs that ensure communities have access to devices and skills needed to fully participate in the digital world, regardless of their background or circumstances. This is the first funding opportunity from the Digital Equity Act’s $1.25 billion Competitive Grant Program and is part of the “Internet for All” initiative, a key component of President Biden’s Investing in America agenda. Under the Notice of Funding Opportunity, a variety of organizations can apply on a competitive basis for funding. NTIA encourages proposals that demonstrate a broad partnership of entities with the ability to administer significant resources and address wide-ranging populations. Applications are due by September 23. U.S. territory applications are due by October 22.  NTIA expects to begin making awards under this NOFO by Winter of 2024. NTIA plans to issue awards made under the Competitive Grant Program on a rolling basis.

USTelecom Letter to Commerce Secretary Adresses BEAD Low-Cost Service Requirement

Jonathan Spalter, Grant Spellmeyer, Gary Bolton, Shirley Bloomfield  |  Letter  |  USTelecom, ACA Connects, Fiber Broadband Association, NTCA–The Rural Broadband Association

USTelecom and more than 30 other broadband industry groups sent a letter to Secretary of Commerce Gina Raimondo covering several ideas for how the National Telecommunications and Information Administration (NTIA) can remedy the issues posed by the rates being approved for the low-cost service option requirement in the Broadband Equity, Access, and Deployment (BEAD)Pprogram.

  • Require each State to revise the low-cost service option rate proposed or approved in its Initial Proposal so that the rate is more reasonably tied to providers’ realistic costs, such as by using the FCC’s Urban Rate Survey benchmark. 
  • Clarify that for purposes of the Part 200 federal interest period, the rate approved in the State’s Initial Proposal for the low-cost service option requirement lasts for two years. Thereafter for the remainder of the federal interest period, States must adjust the low-cost service option rate threshold annually based on either (1) a rate consistent with the FCC’s Urban Rate Survey benchmark, or (2) a rate consistent with the provider’s most competitive promotional offering for that tier of service in their entire footprint (not to exceed the Urban Rate Survey benchmark).   
  • Adjust the BEAD low-cost service option eligibility criteria to mirror that of the Lifeline program, so that providers can confirm consumers’ eligibility for the low-cost service option using the existing National Lifeline Eligibility Verifier. 
  • Issue a blanket waiver of the rate approved in each State’s Initial Proposal for the low-cost service option requirement, so long as it does not exceed the Urban Rate Survey benchmark. Alternate approaches, such as case-by-case waivers, will be unwieldly and impractical and disincentivize participation.
  • Issue guidance that the low-cost service option rate is the effective rate after applying any applicable federal or State subsidies.

New program offers free high-speed internet access to Osage seniors

Sarah Liese  |  KOSU

Osage senior citizens no longer have to pay for internet access, which means they can more easily enjoy online language classes, telehealth appointments and digital tribal news from the comfort of their own homes. To qualify for the new program through Osage Broadband, participants must be enrolled Osage members and have an active account. They must also live within the tribe’s reservation and be at least 55 years old. The service is for internet that is 100 megabits per second, which is classified as a fairly fast speed and is a benchmark set by the Federal Communications Commission. They can also upgrade to faster speeds; however, those other packages come with a cost because they exceed the monthly subsidy of $49.99 per household. 

Maryland leaders work to expand Wi-Fi in West Baltimore

Tashi McQueen  |  Afro News

Sen Chris Van Hollen (D-MD), Baltimore City Mayor Brandon Scott (D-MD), and Federal Communications Commission Chairwoman Jessica Rosenworcel spoke about plans to expand internet connectivity in Baltimore. The Enoch Pratt Free Library currently has about 2,000 hotspots in circulation. According to Meghan McCorkell, Enoch Pratt Free Library’s chief of marketing, communications and strategy, about 969 people are waiting for a hotspot. The FCC voted on July 18 to allow schools and libraries to broaden the E-Rate Program, a federal program that makes internet access more affordable for libraries and schools throughout the U.S. The program specifically permits funds to be used to loan Wi-Fi hotspots to teachers and students so they can use the internet anywhere they go. Chairwoman Rosenworcel elaborated on how many families will benefit from the expansion. “We anticipate more than a billion dollars will be available specifically for hotspots, so it’s gonna make a meaningful difference in a lot of places across the country.” 

Senators Urge DOJ and FCC to Closely Scrutinize T-Mobile Acquisition of UScellular

Sen Elizabeth Warren (D-MA), Sen Amy Klobuchar (D-MN), Sen Chris Murphy (D-CT), Sen Bernie Sanders (I-VT), Sen Cory Booker (D-NJ), Sen Richard Blumenthal (D-CT)  |  US Senate

US senators wrote to Jonathan Kanter, Assistant Attorney General for the Antitrust Division of the Department of Justice (DOJ) and Jessica Rosenworcel, Chair of the Federal Communications Commission (FCC), urging them to closely scrutinize T-Mobile’s proposed acquisition of UScellular. Since T-Mobile acquired Sprint in 2020, just three carriers have dominated the national mobile wireless service market. If approved, T-Mobile’s proposed $4.4 billion acquisition of UScellular would further deplete competition in the industry, giving T-Mobile access to four million new customers. Already, T-Mobile’s 2020 merger with Sprint has had harmful impacts – decreasing market competition, increasing prices for consumers, and harming employees. A class action suit filed in June 2022 charged that decreased competition resulting from the T-Mobile/Sprint merger caused cell phone costs for AT&T and Verizon customers to go up by billions of dollars. U.S. wireless customers have long paid some of the highest prices in the world, and this has only worsened since the merger. In addition to hurting consumers, the T-Mobile/Sprint merger has hit employees particularly hard. The companies have conducted numerous rounds of layoffs, including firing 5,000 employees in the fall of 2023, just two weeks before announcing extensive stock buybacks for shareholders. Antitrust law prohibits any merger that may substantially lessen competition, and the DOJ and Federal Trade Commission’s finalized Merger Guidelines make clear that a merger between competitors that further consolidates a highly concentrated market may impermissibly substantially lessen competition. Given the existing concentration in the wireless market, T-Mobile’s proposed acquisition of UScellular would exacerbate current high concentration levels in presumptive violation of antitrust laws.

Wireless Network Keeping Up with Demand as Customer Problems Decrease, J.D. Power Finds

Press Release  |  JD Power

With the increase of 5G phones and network technology, wireless customers are experiencing fewer problems according to the J.D. Power 2024 U.S. Wireless Network Quality Performance Study—Volume 2. The reduction of problems has led to improved consumer perception of reliability and increased network quality satisfaction. Highlights from the study include:

  • Verizon Wireless ranks highest in the Mid-Atlantic region with a score of 8 problems per 100 connections (PP100). AT&T ranks second with 9 PP100.
  • UScellular and Verizon Wireless rank highest in a tie in the North Central region with 8 PP100. 
  • Verizon Wireless ranks highest in the Northeast region with a score of 7 PP100.
  • Verizon Wireless ranks highest in the Southeast region with 8 PP100.
  • AT&T, T-Mobile and Verizon Wireless rank highest in a tie in the Southwest region with a score of 10 PP100.
  • Verizon Wireless ranks highest in the West region with a score of 9 PP100.

T-Mobile and KKR Launch JV to Acquire Metronet

Michael Susin  |  Wall Street Journal

T Mobile said it entered into a definitive agreement to establish a joint venture (JV) with the investment firm KKR to acquire Metronet as the company aims to increase its fiber solution offer to U.S. consumers. The wireless broadband provider expects to invest around $4.9 billion to acquire a 50% equity stake in the joint venture and 100% of Metronet’s residential fiber retail operations and customers. The JV will also acquire Oak Hill Capital’s existing stake. Oak Hill Capital will make a reinvestment invest to retain a minority position, and its founder John Cinelli will also retain a minority position once the deal closes. Following the transaction’s close, Metronet will become a wholesale services provider for its retail customers, and its residential fiber retail operations and customers will be fully switched to T-Mobile.

An Engineer Shortage?

Doug Dawson  |  Analysis  |  CCG Consulting

SAE International, a professional organization for wireless engineers,  sponsored a report at the end of 2023 that says that the U.S. is already facing a shortage of engineers, and that the problem is going to get worse. According to the report, the U.S. needs 400,000 new engineers every year, but one-third of engineering jobs go unfilled, a trend expected to last through 2030. The SAE report lists some of the reasons for the engineering shortfall.

  • We’ve had a longstanding cap on H-1B visas at 85,000 per year, which covers all technical positions and not just engineers.
  • There is a mismatch between the engineering skills available and the demand. The report says the biggest engineer shortage is for software, industrial, civil, and electrical engineers. There is a market glut of material, chemical, aerospace, and mechanical engineers.
  • SAE also sees a knowledge gap for many engineers. Many open engineering positions need engineers that are familiar with next-generation techniques.
  • Perhaps the biggest problem of all is that most of the people who want to become engineers don’t make it. Only 13% of high school students who express a desire to become an engineer make it to graduation with a college degree in engineering. Even more startling, only half of those who graduate college with an engineering degree go on to become engineers, as many are lured into other technical jobs.

Evaluation of the U.S. Department of Justice’s Efforts to Coordinate Information Sharing About Foreign Malign Influence Threats to U.S. Elections

Analysis  |  Department of Justice

The Department of Justice's Office of the Inspector General undertook this evaluation to assess the effectiveness of the Department’s information-sharing system related to foreign malign influence directed at U.S. elections, evaluate the Department’s oversight and management of its response, and identify any gaps or duplication among the Department’s efforts in this area.  We focused on the Department’s information sharing with social media companies to evaluate the aspect of the Department’s information-sharing system that the FITF developed following foreign malign influence directed at the 2016 U.S. presidential election. We found that the FBI has developed an ”intelligence sharing model,” involving other members of the U.S. Intelligence Community and social media companies, but that neither DOJ nor the FBI had specific policy or guidance applicable to information sharing with social media companies.  We also found that the DOJ components tasked with countering foreign malign influence directed at U.S. elections effectively share information with each other.  In this report, we make two recommendations to ensure that DOJ takes a public and strategic approach to sharing information with social media companies in a manner that protects First Amendment rights to combat foreign malign influence directed at U.S. elections, thus strengthening public trust in the Department. 

Vice President Kamala Harris hasn’t said a lot about tech policy, but here’s what we know

Lauren Feiner, Kylie Robison, Justine Calma, Gaby Del Valle  |  Vox

Vice President Kamala Harris (D-CA) is all but certain to become the Democratic presidential candidate. If elected, Harris would be a president with roots in California’s Bay Area—the heart of the tech industry. Despite her ties to this region, Harris is largely a cipher when it comes to tech policy. As vice president, she is inherently connected to every policy of the Biden administration, but it’s difficult to untangle which parts she would continue and which she would change. Harris has left open the possibility of enforcement of antitrust regulation of big tech, but has avoided giving direct answers on the topic. On privacy, she has said that “the tech companies have got to be regulated in a way that we can ensure and the American consumer can be certain that their privacy is not being compromised.” One area of privacy in which Harris has had a strong, substantive record: legislation and enforcement targeting the sharing of nonconsensual images. As for artificial intelligence, she has called for “legislation that strengthens AI safety without stifling innovation”

Where Vice President Kamala Harris stands on tech policy

Maria Curi, Ashley Gold  |  Axios

Democratic frontrunner Kamala Harris is a long-time friend to the tech industry. For those in Silicon Valley, some of whom have vocally supported former President Trump and Sen. J.D. Vance, Harris' California bona fides may make them think twice. Though Harris would continue President Biden's tech policy agenda, she'd likely be more hesitant to break up Big Tech and strip platforms of their liability shield. As San Francisco's top prosecutor, California's attorney general and the state's U.S. senator, Harris has had a long history with tech. While she is likely to carry out many tech policy initiatives Biden already started, we expect a friendlier tone toward companies, especially as she is likely to keep focus on reproductive rights, immigration and democracy.

What voters want on AI from Trump

Derek Robertson  |  Politico

The Artificial Intelligence Polling Institute asked nearly 1,000 respondents to rate the sometimes conflicting views that Trump allies and the man himself have expressed on AI. What they found might give pause to open-source acolytes and out-there accelerationists alike — and, perhaps unexpectedly, to the Republicans who are ready to line up behind Trump’s desire to repeal President Joe Biden’s sweeping AI agenda. Respondents have serious concerns about the safety of the technology itself. That’s a top Biden-Harris priority that Trump has been downplaying. They’re also majorly worried about keeping the most advanced forms of AI out of the Chinese government’s hands, which seems like a more potentially bipartisan political project. Asked whether Trump in a second term should prioritize keeping the U.S. ahead of China on AI or keeping Americans safe from it, they prioritized safety by a margin of 15 points. But when asked a slightly different version of the question that presented the argument as a choice between more-secure models that protect against Chinese competition, and less-secure models that might protect free speech — the latter a priority articulated by vice presidential candidate JD Vance) — they clearly worried much more about China. In fact they favored keeping advanced AI from China by a much larger margin of 43 points in that case, suggesting that the “free speech” arguments for open-source AI on the cultural right aren’t widely shared.

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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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