Shirley Bloomfield to Testify on ‘State of Broadband’ at Senate Hearing
NTCA Chief Executive Officer Shirley Bloomfield will testify before the U.S. Senate Committee on Commerce, Science and Transportation on May 13 during the hearing, “The State of Broadband Amid the COVID-19 Pandemic,” the Committee’s first hearing to focus on broadband issues since the start of the pandemic.
The hearing will examine what impact funding provided through the CARES Act has had on broadband initiatives at every level, the FCC’s efforts to keep Americans connected and to provide high-speed, reliable broadband to those who are unserved, and how the digital divide that the COVID-19 outbreak has highlighted could be addressed legislatively.
The hearing can be viewed here starting at 10 a.m. EST on May 13.
USAC Announces 5.3% Budget Control for Cost-Based Support Starting July 1; NTCA Advocates Immediately for Relief and Longer-Term Solutions
As part of the universal service fund reforms adopted in December 2018, the FCC increased the “cost-based” universal service budget by nearly $400M per year, eliminating altogether the budget control for the prior few years and resulting in an extremely 0.3% low budget control for the 2019-2020 annual support period. The budget also increases by an inflationary factor each year going forward.
On May 1, the Universal Service Administrative Co. (USAC) announced the budget control mechanism for the 2020-2021 annual support period starting July 1 has increased to 5.3%, based upon the fact that demand by cost-based RLECs for Universal Service Fund (USF) support exceeds even the increased level of support for 2020-2021 by more than $60 million. In other words, even though cost-based RLECs as a whole will be getting more support in the coming year than they did during the prior 12-month period, support demand for the coming year has increased at a level well in excess of inflation.
NTCA is working now to identify the causes for the spike in USF support demand, including potential changes due to Alternative Connect America Fund Model elections occurring last year, any increases in net investment, and/or increases in standalone broadband connections. Precisely because of the potential for such concerns,NTCA had previously advocatedfor reasonable transitional measures to help ensure that USF support demand and the budget control mechanism would not spike. Just days after USAC’s announcement, NTCA has already been in contact with the FCC to urge a suspension of the effectiveness of the budget control pending the national COVID-19 emergency and to request again that the FCC adopt the kinds of transitional measures the association previously recommended.
Analysis: Universal Service Contribution Reform Would Not Hurt Broadband Adoption
New economic analysis commissioned by NTCA examines assertions that broadening the base of contributions to the Universal Service Fund (USF), which is essential to promote the availability and affordability of critical communications services, would undermine broadband adoption and retention.
The study, conducted by Michael Williams, Ph.D, and Wei Zhao, Ph.D of Berkley Research Group, LLC, explores from an economic perspective the effects of modifying and expanding the “contribution base”—the supply of financial resources for the USF—to include both voice and broadband connections. While the FCC has wisely updated the way universal service funds are distributed to orient them more toward support of both voice and broadband services, the contributions system that pays for the FCC’s mission-critical USF initiatives continues to rely precariously upon a dwindling pool of revenues from legacy services.
The analysis proceeds from a survey of consumers to assess preferences when it comes to the procurement of communications services. After taking account of survey results and economic analysis of demand for broadband, the paper concludes that the impacts of including a USF-related contribution surcharge equal to a 1% increase in the price paid for broadband could reduce broadband demand by 0.08%. This would mean, for example, that for every 1,000 consumers spending $80 per month on broadband, an $0.80 USF contribution surcharge might cause one consumer at most to reduce his or her broadband purchase in some way. The paper also observes that this estimated potential reduction in broadband purchases does not take account of any potential gains in adoption realized and sustained as a result of programs supported by a more stable USF.
Also this week, a bipartisan group in Congress, led by Rep. Collin Peterson (D-Minn.) and Don Young (R-Alaska) introduced the Universal Broadband Act, to put the USF on more stable footing, and root it firmly in the 21st century. NTCA has endorsed this legislation and will work to get it signed into law.
“Our nation depends upon policies that both advance and sustain critical communications services for all Americans, and for this reason, the long-term viability of the Universal Service Fund is essential,” said NTCA Chief Executive Officer Shirley Bloomfield. “The economic analysis in this paper indicates that one of the barriers some have raised to more meaningful discussions about reform—that including broadband in the contributions base could suppress adoption—is in fact no concern at all. With a robust economic review confirming this is the case, NTCA hopes that we can now turn back to a discussion of the best means by which to ensure the viability of the FCC’s important universal service programs and the importance of ensuring that all those that make use of our nation’s networks contribute equitably to the cause of universal service.”
Seven NTCA Members Receive ReConnect Funding
U.S. Secretary of Agriculture Sonny Perdue announced new awards this week for New Hampshire, New Mexico, as well as Kansas and Oklahoma, as part of the U.S. Department of Agriculture’s ReConnect Pilot Program.
Granite State Communications (Weare, N.H.) was given a $2 million dollar loan to provide 1 gigabyte upstream and downstream to rural subscribers, including 890 households, an educational facility, and a community facility.
ENMR Telephone Cooperative (Clovis, N.M.) was given a $19.2 million grant to build a fiber-to-the-premises (FTTP) network to serve 789 households.
Penasco Valley Telephone Cooperative (Artesia, N.M.) was given a $3.1 million grant to set up a fiber broadband network to 659 households.
Totah Communications Inc. (Ochelata, Okla.) was given an $18.9 million grant and an $18.9 million loan to build a FTTP broadband network to serve 8,155 residents, 20 farms and 15 businesses.
KanOkla Networks (Caldwell, Kan.) was given a $15 million grant and a $15 million loan to build a FTTP network to serve 2,101 residents, 26 farms and 28 businesses.
Cross Cable Television (Warner, Okla.) was given a $2.2 million grant to build a FTTP network to serve 265 residents, 13 farms, and six businesses.
Carnegie Telephone Company (Carnegie, Okla.) was given a $1.2 million loan to build a FTTP network to serve 926 residents.
Notes in the News
The FCC issued a public notice extending the deadline to June 30 for determining whether to finalize the designations of Huawei and ZTE as national security threats to the integrity of communications networks and the communications supply chain.
NTCA signed a letter along with over 250 members of the Rebuild Rural Coalition asking Congress to prioritize rural infrastructure in the next COVID-19 relief package.
NTCA filed comments with the FCC supporting the FCC’s proposal to allow local, state and other federal agencies to access communications providers’ Network Outage Reporting System (NORS) and Disaster Information Reporting System (DIRS) filings.
Reps. Frank Pallone, Jr. (D-N.J.), James E. Clyburn (D-S.C.) and 10 members of the Congressional Rural Broadband Task Force, proposed spending $80 billion over five years to give all Americans affordable access to broadband.
The FCC released a proposal to use the TRACED Act’s rules to give consumers added protection from one-ring scams.
The FCC issued a public notice stating that it is ready to authorize Connect America Fund Phase II funding for winning bids.
The FCC issued a public notice stating that it will use anonymized Numbering Resource Utilization and Forecast data as part of the 5G Fund proceedings. Parties have until May 11 to oppose the inclusion of their data.