Universal Service Fund

On March 12, 2019, I was honored to appear before the Senate Communications Subcommittee to testify on “The Impact of Broadband Investments in Rural America.” I provided my personal views, bringing the perspective of a former government official with 22 years of experience at the Federal Communications Commission and National Telecommunications and Information Administration, with the last decade focused on the FCC’s Connect America Fund. My five-minute opening statement follows:

We have had what appears to be the world’s most expensive and ineffective universal service program. Until now. The Federal Communications Commission is taking significant steps to dismantle the traditional system and replace it with something world class. In 2018, the FCC launched a new approach that uses a reverse auction to force companies to compete for subsidies. A reverse auction begins with a maximum subsidy the FCC is willing to pay for someone to expand broadband service in a rural area. Companies compete by bidding the amount down.

The Public Utilities Commission of Ohio (PUCO) approved an application by AT&T Ohio to end its participation in the federal Lifeline program.

Sen Tom Udall (D-NM) and Reps Ben Ray Luján (D-NM) and Deb Haaland (D-NM) introduced a bill to make it easier to put wireless internet on school buses in order to help students without broadband access at home get online to study, learn, and complete homework. The legislation would require the Federal Communications Commission’s E-Rate Program to reimburse school districts that place Wi-Fi technology on school buses carrying students to school or school-related extracurricular activities.

The Benton Foundation and EducationSuperHighway met with Federal Communications Commission Wireline Competition Bureau staff and separately with legal advisors to Chairman Pai and Commissioners Rosenworcel and Starks on March 7, 2019, to discuss a white paper on E-rate.

In its continued effort to gain approval for its merger with Sprint, T-Mobile has pledged to keep supporting Sprint's low-income Assurance Wireless brand "indefinitely." Assurance along with Sprint's other prepaid brands, Boost Mobile and Virgin Wireless, and T-Mobile's Metro are popular with lower-income and cost-conscious Americans for their cheaper alternatives to traditional plans than the main four wireless networks.  "The digital divide is real and we want to help eliminate it," T-Mobile president Mike Sievert said.

The Federal Communications Commission issued a public notice stating that it is “ready to authorize” $140 million in rural broadband funding for a portion of the entities that had winning bids in the Connect America Fund CAF II auction. The FCC is still reviewing required information submitted by auction winners and said other winners that meet all requirements to be deemed “ready to authorize” will be included in a future public notice.

The Federal Communications Commission offered an additional $67 million in annual support to certain rural broadband providers that could bring improved service to nearly 110,000 homes and businesses in rural communities across 43 states. Carriers that accept the offer must expand the availability of broadband service delivering at least 25 Mbps downloads/3 Mbps uploads to their rural customers. Carriers have 30 days to decide whether to accept the additional funding.

NCTA-The Internet & Television Association has proposed a three-step method for improving the broadband availability data the Federal Communications Commission uses to direct Universal Service Fund subsidy money:

1. Polygon shapefiles, instead of proposed address-based reporting, could be achieved  as early as 2020.
2. FCC to use crowdsourcing to backstop the reported data
3. Focus on pinpointing unserved areas, which the shapefiles will help do. 

Even as the 2019 E-rate season gets underway, hundreds of school and library applicants are still waiting to learn if they will receive the funding they requested in 2018, the result of an application-review process some observers deride as cumbersome despite years' worth of promised fixes. As of February 1, 752 E-rate applications from the 2018 funding year, seeking a total of $356 million, were still under review. The bulk of the pending requests (more than $115 million) were for "lit fiber" service, delivering high-speed broadband over fiber-optic cable. The delays are "woefully par for