Today's Regulatory Mix: FCC's O'Rielly Proposed Eliminating ETC Required Broadband Providers, US Congress Broadband Connectivity and Digital Equity Framework

The FCC’s O’Rielly Proposes Eliminating ETC Requirement Broadband Providers

In a blog posting, FCC Commissioner Michael O’Rielly has suggested that the FCC eliminate the requirement that successful bidders in FCC USF auctions be designated as eligible telecommunications carriers (ETCs).  He says, in part:

“Over the years, it has become clear to me that certain providers have been discouraged from competing for USF support to serve high cost areas due to the ETC requirement…Compared to the burden and risk of becoming an ETC, certain providers have determined in the past and likely will again that the reward simply isn’t worth it.  The requirement is especially an obstacle for companies that might be interested in leveraging FCC subsidies to edge out to areas that are just outside their service territories but wouldn’t be seeking USF support to massively expand their footprint.  While this calculation may indeed prove to be prudent from a business perspective, it creates unfortunate consequences.  In addition to eliminating some of the most stable and qualified potential bidders from eligible census block groups, it also means fewer bidders in the Commission’s reverse auctions, thus reducing both intra- and inter-area competition.  The result is a less efficient and robust auction, giving ratepayers less bang for their buck, and the potential for certain areas to get neglected when they would have otherwise received bids…”

“Some have argued that the FCC has authority to forbear from the ETC designation requirement on its own accord.  While that claim may have some merit, taking such action would likely be litigated by those state commissions that retain some role over telecom issues.  Rather, this is the type of issue that might be better settled by Congress.  Fortunately, the cause has garnered attention from Congress and legislation on point was introduced just last week in the House of Representatives by Congressman Butterfield (D-NC)…”

“If complete elimination of the ETC designation is not in the cards, perhaps there are some other fixes to our current framework that should be adopted.  For instance, instead of the current process whereby providers must seek ETC designations from each state where they have won the obligation to serve, there should be a single, uniform application accepted in all states and a time limit for approving applications, also applicable to the FCC when designating federal ETCs.  If our country can do this for the college application process, it can be done here too.  Further, state commissions must be prohibited from imposing extraneous conditions or requirements in exchange for ETC designation over and above applicable FCC rules.  It’s one thing to allow state commissions to enforce federal standards and quite another to allow these bodies to add new obligations at their whim.  And, finally, the process for obtaining FCC broadband subsidies should make clear that a company designated an ETC by virtue of being a USF auction winner is not therefore a Title II telecom carrier, which confers a host of burdens and obligations far outside the scope of this blog.  Otherwise, the classification of broadband as a Title I Information Service could essentially be nullified by regulatory sleight of hand.”

US Congress Broadband Connectivity and Digital Equity Framework

U.S. House Energy and Commerce Committee Republican Leader Greg Walden (R-OR) and Senate Commerce, Science, and Transportation Committee Chairman Roger Wicker (R-MS) announced the release of principles for a legislative framework to expand broadband access and digital opportunity and close the digital divide. This framework would serve as a foundation for legislative efforts related to the COVID-19 economic recovery, modernizing the nation’s communications infrastructure, allowing all Americans, regardless of where they live, to participate in the digital economy, and enhancing U.S. network security, reliability, and resiliency.

The Framework would close the digital divide by:

• Authorizing funding to complete accurate broadband mapping efforts and deploy broadband quickly in areas throughout the United States to make sure all Americans are connected;
• Ensuring that children have access to be able to complete their homework remotely;
• Establishing programs so that anyone experiencing economic hardship as a result of the COVID pandemic remains connected and knows what resources are available;
• Expanding broadband access and digital opportunity in minority communities to promote digital equity; and,
• Working with our nation’s carriers, who have worked tirelessly to keep Americans connected during the COVID pandemic, to make sure they are able to continue responding to their consumers quickly and safely.

The framework would also:

• Provide Regulatory Relief through streamlining permitting processes for telecommunications infrastructure and equipment to promote broadband deployment, job creation, and investment in next-generation communications networks.
• Enhance Public Health, Safety, and Network Security by:
• Authorizing funding to fully implement the Secure and Trusted Communications Act, Public Law No: 116-124, and invest in the deployment of open radio access network technologies;
• Investing in our 9-1-1 communications infrastructure; and,
• Ensuring that the Federal Communications Commission’s telehealth program has the necessary resources to make sure health care facilities have the appropriate technologies to treat patients remotely.

“Before the COVID-19 pandemic, 21 million Americans did not have access to broadband services. The need to deploy broadband, bridge the digital divide, and close the homework gap have been highlighted during the COVID-19 pandemic as Americans work, learn, and receive health care from their homes,” said Walden. “I am proud to work with Chairman Wicker on a bicameral broadband and digital equity framework that will make meaningful strides toward expanding access to vital broadband services, securing networks, and closing the digital divide for all Americans. We must work to connect all Americans and maintain U.S. leadership on next-generation technologies.”

“The coronavirus pandemic has made expanding access to broadband even more urgent,” said Wicker. “This framework would support the delivery of these services by fostering investment, promoting broadband deployment, and enhancing network security and resiliency. I thank Ranking Member Walden for working with me to help expand reliable broadband connection to all Americans.”

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The Regulatory Mix, Inteserra’s blog of telecom related regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of an Inteserra Briefing.