Archive for February, 2017

OET Authorizes First LTE-U devices

Wednesday, February 22nd, 2017

Today the Office of Engineering and Technology authorized the first LTE-U (LTE for unlicensed) devices in the 5 GHz band.  This action follows a collaborative industry process to ensure co-existence of LTE-U with Wi-Fi and other unlicensed devices operating in the 5 GHz band.

The Commission’s provisions for unlicensed devices are designed to prevent harmful interference to radio communications services and stipulate that these devices must accept any harmful interference they receive. Industry has developed various standards within the framework of these rules such as Wi-Fi, Bluetooth and Zigbee that are designed to coexist in shared spectrum.  These and other unlicensed technologies have been deployed extensively and are used by consumers and industry for a wide variety of applications.

LTE-U is a specification that was developed and supported by a group of companies within the LTE-U Forum.  LTE-U and Wi-Fi stakeholders worked together under the auspices of the Wi-Fi Alliance to develop co-existence guidelines and an evaluation test plan that was released last fall.

The LTE-U devices that were certified today have been tested to show they meet all of the FCC’s rules.  We understand that the LTE-U devices were evaluated successfully under the co-existence test plan.  However, this is not an FCC requirement and similar to conformity testing for private sector standards the co-existence test results are not included in the FCC’s equipment certification records. 

The circumstances in this instance were unique.  We remain committed to ensuring that all who seek to introduce new products and technologies may do so provided their devices comply with the FCC rules. 

A Modified Delegated Authority Proposal

Wednesday, February 22nd, 2017

I have made the case previously that the Commission delegates way too many substantive decisions to Bureau staff, usurping the role and obligations of duly appointed and confirmed Commissioners.  Consider that in 2016 I only voted on 167 items, but almost nine times as many were decided on delegated authority.  While some people found my points compelling, the prior Chairman’s staff objected, arguing that changing the practice would lead to chaos and dilatory tactics.  In the spirit of compromise, I moved away from the idea that an individual Commissioner should have the right to effectively “undelegate” any item and call for a full Commission vote.  Instead, I proffered a modified structure during closed-door discussions with representatives of the then-Chairman and other Commissioners’ offices.  While this was ultimately rejected at the time, it seems appropriate to see if it may be agreeable in this new Commission.

The heart of my revised delegated authority proposal is an attempt to achieve balance between the need to allow Commissioners to have greater say in the workings of the Commission and preventing process abuses and unnecessary delays.  Here are its main components:

  • Advanced Warning – Consistent with my previous recommendation, except for the most routine matters, Commissioners should be provided no less than 48 hours to review an item that is to be decided by Bureau staff under delegated authority.  Certain Bureau-level items, such as universal service decisions, are already provided to Commissioners 48 hours prior to release for informational purposes, but, under the past administration, this practice was not uniformly applied across the agency or even within the same Bureau.  This reasonable practice allows a sufficient timeframe for Commissioners to determine whether the proposed decision should be decided by the full Commission.  Further, it doesn’t delay an item so long as to jeopardize the ability of the Commission to take swift action when necessary.
  • Request by Two or More Commissioners – On any given matter, it is possible that any one Commissioner could be troubled by the substance or process of an item.  Additionally, the culmination of numerous matters could influence a Commissioner to demand full Commission votes on everything under the sun, which, it was argued, could cause delay and endless votes by Commissioners.  While I wouldn’t necessarily have a personal problem voting more often, I can see why some may find a one-Commissioner trigger problematic.  Accordingly, the threshold to bring an item up to the floor for a vote should be set at two Commissioners.  Quite frankly, if a Commissioner can’t convince at least one other to join their cause, we should move forward posthaste.
  • Time Constraint – A concern was raised that having two Commissioners as the proper threshold may not necessarily provide a sufficient barrier to excessive or needless delays.  As a remedy, I propose that any item that is removed from delegated authority under these procedures must be voted by the full Commission within seven calendar days or five business days (although I might be willing to live with a shorter deadline).  This should ensure that items previously set for delegated authority, but then subsequently elevated, will be addressed quickly. 
  • Automatic Approval if Delayed – Under my proposal, in those instances (if ever) when a requesting office does not vote by the deadline, the item would be – at the Chairman’s prerogative – either released as approved by the full Commission (assuming the other offices voted to approve) or sent back to the Bureau for immediate issuance on delegated authority.  In other words, a requesting Commissioner that does not vote by the deadline risks the possibility that their failure to act would be deemed an approval and the item would be disposed of by the full Commission.  An added benefit is that this would effectively shorten the procedural path to obtain a final Commission decision by eliminating the need for stakeholders to “appeal” the Bureau-level item to the Commission by filing an application for review.

Fixing the overuse of delegated authority should be high on our list of priorities as the new Commission examines internal process reform.  Hopefully, my proposal finds support from those seeking to improve the efficiency of the Commission’s procedures and those worried about improper constraints on the ability of the Commission to function. 

The particular Incentive Auction Clock Phase Is Over. What’s Next?

Friday, February 10th, 2017

February 10, 2017 – 4: 18 pm

Gary Epstein | Chair, Motivation Auction Task Force

Jean L. Kiddoo | Deputy Chair, Motivation Auction Task Force

Today marks the end of most clock phase bidding in the incentive auction. This is a noteworthy…

Needed: A Universal FCC Deadline Policy

Wednesday, February 8th, 2017

For Commission rules and procedures to be truly effective, everyone needs to know with a certain level of confidence what will happen if applicable deadlines are missed.  Not only does this not exist today, but the Commission’s inconsistency with how it responds to late filings borders on arbitrary and capricious.  To rectify, I suggest it is time to establish a universally-applied policy that, from now on, everyone is expected to either comply with all applicable deadlines or face the consequences.  Let’s remove the ambiguity and wide disparity of approaches once and for all.     

Depending on the particular issue and the specific bureau, a provider or individual subject to Commission rules can see vast differences in how the deadlines are treated and enforced.  The simple fact is that some bureaus are far more forgiving about timeliness than others.  This makes little sense and unfairly penalizes those industry sectors that do not receive such benevolence.  Certain bureaus have dismissed a petition for reconsideration filed one day late, are more than willing to cancel Commission-issued licenses that are not in compliance, and exclude auction participants that miss a deadline at the drop of a hat.  For instance, in the auction context, an applicant whose down payment was a day late was disqualified from acquiring auction licenses and assessed a default payment.  And, a licensee whose renewal application was three days late lost two wireless public safety licenses.[1]  

On the other hand, some bureaus seem to go out of their way to make late filings seem as our mistake and work with applicants to rectify their omission, making them completely whole.  Take for instance, WAJM, an FM station in New Jersey, where the Commission renewed the authorization, even though the licensee failed to file the required paperwork until four years after the conclusion of its term.  The item states, “the Commission consistently has allowed broadcast station licenses to be renewed even though the license renewal application was filed after the license term expired.  Adopting a contrary position in this case, without any prior notice to the Board, would violate the Board’s due process rights.”  Given the circumstances, I supported the item’s outcome, but why was it allowed to come to this?  Similarly, the Wireline Competition Bureau’s recent policy change permits USF high-cost recipients to miss interim buildout deadlines, cure at a later date but still receive 100 percent of any withheld funds, and missing a final milestone and failing to cure within 12 months results in a penalty of only ten percent of the high-cost support.  This should strike everyone as too forgiving for missing their commitments to the Commission and, more importantly, to consumers.  Moreover, consider the fact that failure to timely file information with the Commission, including certifications, now results in a small base penalty and a pro rata reduction in the associated high-cost support. 

This doesn’t mean to suggest that special circumstances do not exist, from time to time, to justify missing a deadline.  Things happen in the real world, outside the control of the affected party, which may prevent complying with specific requirements by a set date.  That’s why the Commission’s rules include waiver authority.  Exercising thoughtful and judicial waiver authority, however, is a far cry from having multiple and competing standards, practices or understandings about what happens when a deadline is missed.  In fact, the lax deadline approach means that, in some circumstances, there is no need to get to the waiver stage, since missing a deadline is ultimately acceptable in one form or another.    

Let me be clear that I am not blaming any particular bureau or staff for the current state of affairs.  That’s a bit like debating how the boat sank when you’re surrounded by sharks.  Instead, let’s focus on correcting the situation going forward.  This means showing leadership on the Eighth Floor; we have an overarching view of the Commission’s deadlines and how they are being enforced.  So, if we take that knowledge and compose a firm policy on deadlines, it would improve Commission functionality, bring clarity to regulated entities and help stabilize our overall enforcement mechanisms.       

Enforcement Amnesty Window

The past Commission’s approach to enforcement matters – one generally based on optics and achieving headlines– discouraged regulated entities from self-reporting any instances where they may be out of compliance.  And who can blame them?  Too many times that particular Commission used information reported by companies – those trying to do the right thing – against them.  When enforcement turns into a game of gotcha, there really isn’t much desire by parties to voluntarily poke their heads up.

Beyond reestablishing a sound enforcement approach, I suggest it’s time to consider creating a short, defined window for companies to report instances in which they are not in compliance with Commission rules.  Call it an Enforcement Amnesty Window in order to get everyone back within bounds of our rules.  Such an amnesty period would be short and shouldn’t apply to intentional non-compliance or those violations that resulted in direct harm to consumers.  What I envision as being eligible for relief are the same type of licensing and deadline errors as discussed above and other minor licensing matters that can be easily rectified.

Such an approach is not without precedent.  In 2003, the Commission held a 60-day amnesty window for unregistered antenna structures.  In that instance, the Commission determined after an audit that 442 communications towers sites were not in compliance with our antenna structure registration requirements.  Applicants had a chance to fix their information on file or face future enforcement actions.   

*             *             *

As it stands now, the Commission is unintentionally favoring some parties over others through its disparate treatment of its deadlines.  Moreover, combining a short amnesty window to rectify current instances where licensees may not be in compliance with the implementation of firm deadlines, going forward, would help restore administrative certainty, transparency, parity, and confidence in our enforcement process.

[1] In fact, the Commission has a policy for wireless services that permits some leniency if an application to renew a license with an accompanying waiver is 30 days late, but expressly states that anything filed beyond that will be subject to a stricter review and will not be routinely granted.  Regardless of when the corrective application is filed, a licensee could be subject to enforcement action.

Setting the Record Straight on the Digital Divide 888011000110888 In my first remarks as Chairman of the Federal Marketing communications Commission to the agency’s terrific employees, I stressed that one of my top priorities would be to close the particular digital divide — the distance between “those who can use cutting-edge communications services and those who never. ” I’ve explored that separate for myself in places like Barrow, Alaska; Los Angeles, California; Clay, Western Virginia; and many more places. Now that I’m at the helm of the agency, I’m determined to address it. We’ve already hit the ground working. In the first vote under my Chairmanship, I worked with New York Governor Andrew Cuomo, Senator Charles Schumer, Representative Chris Collins, and other officials in order to direct $170 million in federal government funding to build out broadband within upstate New York to places which are currently unserved. Within the second week of my Chairmanship, I shared with my colleagues make votes for February 23 on two detailed proposals for closing the electronic divide. One of them would direct vast amounts of dollars — with a “b” — over a decade toward making sure that almost all parts of this country have 4-G LTE coverage. (Currently, there are too many gaps where your phone shows “No Service” — as I noticed for myself during a recent generate from Wichita, Kansas to Kklk Moines, Iowa. ) The other might allocate nearly $2 billion — again with a “b” — pertaining to advancing fixed broadband service across the nation. With more connectivity, more Americans than in the past will have digital opportunity. Finally, I’ve engaged with Users of Congress about my proposal regarding Gigabit Opportunity Zones. Under this infrastructure plan, the government would make use of tax incentives to encourage the deployment of ultra-fast broadband in lower-income areas as small as an urban city block and as large like a rural county. It would also motivate entrepreneurs to take advantage of these next-generation networks by creating jobs in those areas. Gigabit Opportunity Areas and specific zones would enable Americans to become participants in, rather than spectators of, the digital economy. They would be a effective solution to the digital divide. I hope our elected officials will give the idea serious consideration. * * * Simultaneously, one recent FCC decision provides caused some controversy of late. Particularly, some have asked why the agency’s Wireline Competition Bureau issued an order reconsidering nine companies’ eligibility to participate in the Lifeline program, which aims to help make voice and broadband more affordable to low-income Americans. It’s vital that low-income Americans have access to communications services, including broadband Internet, which usually Lifeline helps to achieve. Unfortunately, many of the media headlines have got sensationalized this story and provided some an entirely misleading impression of what is going on. Indeed, based on the some of the insurance coverage, one would think that we had ended Lifeline broadband subsidies altogether. So I want to set the record straight in regards to the modest steps we have taken plus why we have taken them. First , the action only impacted 9 from the over 900 providers participating in the particular Lifeline program. In other words, 99% of the companies participating in the program are certainly not affected at all. Second , the applications of these nine providers to participate in the program have not been rejected. They simply remain pending at the Commission. Third , all but among the newly designated providers covered by the order do not yet have any customers. Fourth , the prior FCC disregarded the well-established process regarding approving applications like these. As the Nationwide Tribal Telecommunications Association pointed out, several of the providers had never coordinated their applications with Tribes, regardless of an FCC rule clearly requiring them to do so. These Tribal associates thus requested that the designations end up being reversed. Moreover, two of the designated providers were approved in the middle of the 30-day period for public comment — that is, before the public even had a chance to weigh in over the designation. Whatever one thinks of the value of these applications, that was plainly incorrect. Fifth , many of these designations were approved within the last days of the last Administration (two times before Inauguration Day), over the arguments of two of the four Commissioners, despite the fact that the FCC’s congressional oversight committees had requested that the Fee not take controversial actions during the changeover between Administrations (consistent with the request from those same committees throughout the Republican-to-Democrat transition in 2008–09). Thus, a majority of Commissioners never supported authorization of these designations. Sixth , every dollar that is spent on subsidizing somebody who doesn’t need the help by definition will not go to someone who does. That means that the Commission needs to make sure that there are strong safeguards against waste, fraud, and abuse before expanding the program in order to new providers. But consider: The National Verifier — which is a new database that is intended to verify eligibility to participate in the Lifeline program — does not currently exist and will not start operating until the end of 2017. Further, it is not scheduled to cover just about all states until 2019. My investigation last year into these matters revealed serious weaknesses in federal shields, allowing providers to indiscriminately override checks that are supposed to prevent wasteful and fraudulent activities. (These bank checks include common-sense steps like confirming the identity of would-be Personal assistant recipients. ) From October 2014 until June 2016, wireless resellers had overridden such safeguards 4, 291, 647 times in total. The investigation also uncovered some other loopholes, including one that let a business claim subsidies for approximately 22, 1000 phantom subscribers each month in the condition of Michigan. Seventh and finally, there is a serious question as to whether the FCC has the legal authority to specify Lifeline providers or whether this kind of designations must be made by state government authorities, as has long been the norm. Indeed, some time before the prior FCC issued these last-minute designations, state regulatory agencies got filed a substantial legal challenge to the entire process of the FCC designating Lifeline Broadband Providers, arguing that will it’s unlawful, and the FCC itself recently asked the court for more time to consider this issue. For instance, Area 214 of the Communications Act explicitly says that states must make designations intended for purposes of allowing companies to receive Lifeline subsidies. The FCC has frequently, and for many years, recognized states’ major role in this area. By preempting the particular states’ role in certification, the particular federal designations appear to run afoul of this legal framework. Putting the particular designations on hold gives the FCC the chance to make sure the process is lawfully defensible and to avoid potentially stranding customers if the courts ultimately consider the process unlawful. Hyperbolic headlines always attract more interest than mundane truths. For example , a tale detailing how the FCC was starting further review of the eligibility associated with 1% of Lifeline providers wouldn’t generate too many clicks. That’s always been the case in policy debates, obviously. But at the end of the day, my focus continues to be — and will continue to be so long as I use the privilege of serving as the Chairman of the FCC — performing everything within the FCC’s power to close up the digital divide. I am dedicated, both by belief and by regulation, to ensuring that the agency is focused over the 21st century version of our 20th one hundred year charge: “to make available, so far as feasible, to all the people of the United States, without splendour on the basis of race, color, religion, nationwide origin, or sex, a rapid, effective, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges. ” We’ve made progress over the past couple weeks, and we’ll do more in the time to come to benefit all Americans. Take note: This article was originally posted on Medium. com

Tuesday, February 7th, 2017

February 7, 2017 : 12: 45 pm

Ajit Pai | FCC Chairman

In my…

My Personal Story in Search of #PhoneJustice

Tuesday, February 7th, 2017

It is 9:10 a.m. on Monday, February 6, 2017, and I am sitting in the courtroom without my cellphones. Like many who find themselves disconnected from their mobile device(s) for any length of time, I feel extremely uncomfortable and detached from the rest of the world. But whatever my discomfort, it pales in comparison to the day-to-day economic and personal torture felt by millions who remain on the wrong side of the economic justice divide and struggle to stay in touch with incarcerated loved ones.

Innocent or guilty, too often poor and disenfranchised, millions of mostly black and brown families suffer mightily. They suffer because we who are sworn to serve them have turned our backs on the nation’s most vulnerable communities.

We are quick to judge and do not think twice as we ignore the plight of the families, friends and representatives of those imprisoned, but awaiting their day in court, and the millions of others who have been sentenced and are serving time: rightly, wrongly or unfairly. But the most callous indictment of us all, is how little we appear to care about the 2.7 million children, the ailing grandmothers and the other often-destitute family members who pay a heavy price just for picking up the phone and keeping in touch.

But my biggest discomfort of the day, as I wait for the court to come to order, is my struggle with my feelings about my (former) state colleagues, who are steadfast in defending their positions against the FCC when it comes to inmate calling primarily on jurisdictional grounds. For years, I have not only asked, but begged them not to sit idly by as the people they were sworn to defend suffer mightily from a clearly dysfunctional inmate calling services marketplace. Most of them have elected to do nothing, but are quick to stand boldly and shout loudly about just how far they think we have overstepped our regulatory bounds.

“Do your job,” I scream silently this morning. “If you’d bothered to act, we would not even be here today!” And at the risk of further straining some long-standing relationships, I will retire for the evening still asking: “why won’t you just act?!”

The minute hand on the analog clock is about to approach the 9:30 a.m. hour and as I sit in a sea of blue, gray and black suits, I notice something remarkable and striking: The people poised to defend their positions this morning as well as those in the courtroom (with the exception of one judge, two employees and me) do not look remotely similar to the majority of the millions whose lives hang in the balance today.

Calm down, I say to myself. Calm down, Mignon, and pray that just this one time, the angels of justice will smile brightly on us this morning.

“Oyez, oyez, oyez,” I hear the court clerk announce. And so, the hearing begins.

Federal Broadband Infrastructure Spending: Potential Pitfalls

Wednesday, February 1st, 2017

Much discussion in Washington, D.C. and elsewhere is occurring over whether there should be an expansive infrastructure spending and policy bill.  For those in the communications space, this has spurred interest in inserting broadband-related infrastructure provisions within such a legislative vehicle.[1]  While sound telecom policy provisions that promote infrastructure buildout could make sense, I would argue that policymakers should be leery of new communications infrastructure spending, as the last thing consumers or businesses need is an encore of the market distortions caused by the last Federal government economic stimulus efforts.  For the sake of efficiency and soundness, if new government money has to be included for broadband, it should be done in a way that does not harm competition in the marketplace, prevents bureaucrats from picking winners and losers, is technology agnostic, distributes resources in an effective and efficient manner, and does not undermine the FCC’s universal service high-cost program.

It only seems appropriate to start by recognizing the positive state of U.S. broadband.  While some disparage the progress that has been made, the fact is that broadband is widely available in most parts of America, certainly at a level to meet the actual demands of users.  As the FCC’s own reporting showed using 2015 data, ninety percent of Americans have broadband access at speeds of 25 Mbps or better, and it has only improved since then.[2]  That doesn’t mean we should rest on our laurels, but it does mean that we should salute the work already done by private broadband companies and address any barriers preventing more extensive deployments, including reducing regulatory burdens.  It also means that we should redouble our efforts to build out to areas without service or lacking sufficient service today through market-based mechanisms.  Sadly, I have visited parts of America that are without any option for broadband service.  Getting to work on the FCC’s Remote Areas Fund, as I have called for over the past three years, would be a step in the right direction. 

Our current broadband successes also mean that we should discard old arguments that are not based on reality or serve as a distraction to our true mission.  For instance, continuing to debate the status of U.S. broadband compared to other nations, especially based on misleading rankings like those of the OECD,[3] is inappropriate.  Simply examining our nation’s vast geography should remind everyone of the difficulty of serving all populated parts.  America isn’t some peninsula or archipelago with a saturation or population density of 100s per square inch.

In all seriousness, while a portion of America’s entrepreneurial and individualistic spirit comes from the vast open land available, especially in the west, this makes broadband deployment to all corners more challenging.  According to the OECD’s latest statistics, South Korea’s fixed broadband penetration subscriptions per 100 inhabitants was ranked fifth compared to the U.S. ranking of seventeenth,[4] but Korea’s population density in 2015 was 519 per square kilometer compared to our 35.[5]  Thus, artificial comparisons to other nations of different sizes and terrains doesn’t serve much value without understanding the contextual situations we face as a nation. 

Moreover, broadband measurements have been based on contrived FCC definitions and unproductive thresholds.  It simply isn’t true that every user within a city, town, village, or hamlet must have or demands broadband at a certain speed, such as downloads of 25/50/100 Mbps.  Examining closely the assumptions used by the Commission to establish its benchmark of “acceptable” broadband highlights its detachment from reality and its intention to use the benchmark for political and regulatory purposes.  More importantly, focusing on artificial speeds diverts attention and resources from establishing service to those lacking any broadband service.  The outcry for things like ultra-high speed service in certain areas means longer waits for those who have no access or still rely on dialup service, as providers rush to serve the denser and more profitable areas that seek upgrades to this level.  Today, ultra-fast residential service is a novelty and good for marketing, but the tiny percentage of people using it cannot drive our policy decisions.  Instead, we should strive to ensure that broadband of a realistic speed and quality is available for as many as possible, knowing it will be far exceeded in most circumstances.

Fundamentally, our broadband policy has been and should continue to be based on private sector companies continuing to build out their networks to meet consumer needs.  Unlike government entities, the private sector has the technical knowhow and experience to build and operate complex communications systems.  The surest way to continue the current trajectory of progress is to remove barriers to entry for new technologies or deployment.  As I have testified before Congress previously, some states, localities and Tribal governments are making it more difficult to deploy broadband throughout our nation.  Evidence and experience shows that a number of these entities are imposing extensive and costly process reviews or trying to extract huge payments from communications companies for the “right” to serve their residents.  I am hopeful the Commission will continue its work to strike these down. 

Despite best efforts to date, consumers in some areas in America do not have sufficient broadband.  In these areas where there is no business case to provide broadband, the law provides the Commission with the responsibility and the duty to take remedial action.  To facilitate this obligation, the Commission operates subsidy programs by which providers are given financial resources obtained via fees from consumers as an incentive to serve less profitable areas.  The Commission’s extensive work has created relatively cost-efficient distribution mechanisms, including reverse auctions, based on the best data available and taking into account appropriate factors to ensure that the subsidies are provided only where, when and at the level actually needed.  While not perfect by any stretch, the Commission’s universal service high-cost program defensibly allocates resources in a relatively well-reasoned and rational way.  At the current time, the Commission distributes approximately $4.5 billion annually for these purposes, and projects in the pipeline will dramatically improve overall broadband access in harder to reach areas in the coming months and years ahead.  Moreover, the FCC’s high-cost program is oversubscribed compared to its budget, which is appropriately tied to how much we can extract from consumers, meaning that there is room to add additional funding that would lead to further deployment gains. 

The good work being done by the private sector and the Commission has not prevented some from advocating for expending additional Federal dollars for broadband, hopefully by providing additional resources to private companies to expand their reach and enter new territories (and not funding government networks).  While seemingly helpful, there are serious potential drawbacks to this action, especially if it is done in a haphazard way.  Here are just a few of the major issues and problems:

Harms to Private Sector In countless meetings over the last three years, I have heard about the harmful effects of the Obama Administration’s economic stimulus legislation, especially the Broadband Technology Opportunities Program and Broadband Initiatives Program (BTOP & BIP).  While supporters point to miles of fiber laid or anchor institutions connected, they fail to mention what this funding did to the competitors in the immediate and surrounding areas.  When one provider received special funding, it distorted the ability of non-recipients to operate, pay off debt, raise capital, and satisfy consumer interest.  In other words, artificially propping up select companies impacted the ability of others to compete, including growing their networks to unserved or underserved areas, and that doesn’t even include a critique of where grants were provided to overbuild existing providers.  With areas completely unserved or in need of upgrades, it makes little sense to direct federal dollars to fund competition.    

Overpaying and Over Subsidization – At its core, the Commission’s high-cost program is designed to limit any subsidy provided to broadband companies to only what is absolutely needed to promote access.  The institution of reverse auctions uses market forces to get providers to compete – thereby driving down the subsidy costs – for particular areas.  On the contrary, grant programs or loan subsidies do not induce any competitive pressure.  This means the Federal government overpays for broadband deployment in these scenarios. 

Lack of Coordination Experience from the 2009 stimulus showed that insufficient coordination was done with the FCC by the Departments of Commerce and Agriculture as they created and operated their programs.  That means that, as bureaucrats were preparing to distribute multi-billions of dollars, they had little to no understanding of the prior and future commitments made by the Commission or how their programs would fit together with the Commission’s data intensive high-cost program.  In the end, the Commission was left to piece together the remnants of what was done by the other agencies in order to prevent duplication and address those areas still in need. 

Bureaucrats Picking Winners & Losers Application-based programs use highly-questionable selective criteria (e.g., points system) combined with human intervention to determine what projects to fund.  This allows non-efficient factors to influence the outcome and cultivates an environment for political gamesmanship.  At a time when so much focus is on reducing undue or improper involvement by D.C. lobbyists and politicians, shouldn’t there be equal concern that any new broadband programs aren’t monopolized by the well-connected? 

Technology Discrimination – The Commission has spent the last 18 months ensuring that its program does not discriminate against any technology able to serve consumers. Unfortunately, many broadband programs are designed to be fiber first or fiber only and provide preferences to ensure other technologies do not win any funding or serve any consumers.  This myopic view ignores the development of other technology capabilities and allowances for terrain. Dragging fiber to the top of every mountain may not make any sense in terms of cost, time to build, safety of installers and long term survivability against the surrounding elements.  Alternatively, fixed wireless broadband or satellite may be the most appropriate solution.

Instead of reinventing the wheel, if – and that’s a big if – additional Federal broadband spending is deemed important and appropriate, I would argue that such funding should be directed into the Commission’s existing high-cost subsidy program. Because the program is oversubscribed within the current budget there is room to inject funding without causing dramatic changes or jeopardizing its operation.  In addition, the high-cost program can be extended quickly with existing agency personnel, resources and oversight, whereas creating new programs within other agencies would require rebuilding that infrastructure and accountability, adding time and expense.  In short, increasing the allocation with other resources would allow greater broadband expansion in a timely and more cost efficient manner, and with less influence peddling.  


[1] I don’t believe it is my role to criticize legislative proposals without invitation.  I write only to offer my thoughts and concerns regarding the components of the public debate occurring.  

[2] Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, as Amended by the Broadband Data Improvement Act, GN Docket No. 15-191, 2016 Broadband Progress Report, 31 FCC Rcd 699, para. 4 and Table 1 (2016), https://apps.fcc.gov/edocs_public/attachmatch/FCC-16-6A1.pdf.

[3] Organization for Economic Cooperation and Development.