Old Broadband Battles Flare as FCC Crafts Plan for Rural America

In the 2008 Farm Bill, Congress directed the FCC to develop a report on rural broadband by May 22. The FCC received input on a wide variety of policy issues, including broadband supply and demand, universal service, intercarrier compensation, pole attachments and competitor access to incumbent networks.

One telecom industry attorney said NTIA and RUS could give FCC recommendations some weight as they craft their respective grant programs. “NTIA is having their round tables. They're hearing form the public,” the lawyer said. “I think [the FCC recommendations] will have an impact on what NTIA ultimately does.” Following the FCC’s recommendation to some extent is also safest for NTIA and RUS, the lawyer said. “The FCC has an extensive record on all of these subjects.”

While many comments zero in on key issues regarding the grant programs, such as how to define an unserved versus an underserved area, those decisions won’t be made at the FCC, a wireless industry executive said. “That’s going to be decided at the agencies that have the money,” the executive said. “The advice of the FCC will largely be a footnote.”

There aren’t many new arguments in the comments, so it shouldn’t be a tough task for the FCC to wade through them during the tight timeframe, a wireline industry official said. Even if the FCC doesn’t glean much new information from comments, it at least lets the agency “check the box” so it can proceed with the report to Congress, the official said. Comments received in the Farm Bill proceeding likely will be complementary to ones received next month when the FCC gets input on developing a national broadband plan, with many arguments repeated, said the official.

The FCC has “tremendous technical expertise and historic knowledge on rural broadband issues,” said Jessica Zufolo, a Medley Global Advisors analyst. “The comments will certainly be instructive but they probably won’t reveal anything new or different from what’s already out there.”

Getting the “biggest bang for the buck” was the theme of many comments. “There is not enough funding to provide universal high speed broadband to all consumers, and the highest priority should be to provide the service to the unserved at the lowest unit cost, and in areas where demographics suggest that adoption rates will continue to climb,” said the American Homeowners Grassroots Alliance. The FCC “must rely on hard data,” such as broadband maps funded by the Recovery Act and information collected from the revised Form 477, said Verizon.

The plan mustn’t ignore minority communities in rural areas, but rather make them the No. 1 priority, said the Minority Media and Telecommunications Council. “Generally, when deploying rural broadband, the norm has been to construct a backbone along main highways, then branch out broadband service from that backbone to communities adjacent to these major thoroughfares,” it said. “For decades, this approach has had a negative impact on rural minority communities which, because of historic racial segregation, the aftereffects of slavery or (in the case of Native American reservations) land theft, are situated far from major highways.”

The plan should additionally address demand-side issues, including computer literacy and computer ownership, Verizon said. Consumer groups agreed. “While the largest problems in adoption of broadband have been availability and cost, there are also skill and attitudinal barriers to adoption,” said Consumers Union and the Consumer Federation of America.

The FCC should take the lead in coordinating broadband matters among agencies and states, AT&T said. The commission “could serve as the repository of information about which entities (public, non-profit, private) have received or are receiving federal dollars for broadband build out and for which geographic areas, regardless of which federal government organization provided the funding,” AT&T said.

But the American Farm Bureau Federation said the U.S. Agriculture Department should govern rural broadband deployment efforts. The federation represents more than 6 million rural families. “Most of the agencies that will be involved in building this new telecommunications infrastructure have limited roles in an understanding of rural America,” it said. In contrast, “USDA has an office in almost every rural county in the nation,” staffed by members of the community who “know the education, healthcare, business and government leaders in their communities and are able to readily identify local partners for federal efforts,” the federation said.

The FCC should involve the private sector and other outsiders as it develops the rural broadband plan, said the Independent Telephone & Telecommunications Alliance. “Imperative to development of an effective national strategy is the inclusion of stakeholders who are intimately knowledgeable about and have connections to rural communities,” ITTA said. “The creation of such ‘focus groups’ within the inter-agency framework would ensure rapid communication among regulators and affected interests.”

Rural incumbent carriers said USF revamps should be part of the plan. Broadband and loans may spur construction, but USF is needed to “ensure the ongoing availability of broadband services in rural areas,” said the National Exchange Carrier Association. The FCC should add broadband to the list of services funded by the high-cost program for rural incumbent carriers, and lift the cap on support, said the Organization for the Promotion & Advancement of Small Telecommunications Companies. The FCC could do this without significantly increasing the size of USF by killing the identical support rule, which bases subsidies to competitors on incumbents’ costs, and by expanding the contribution base “to include all broadband providers on an equitable basis,” OPASTCO said.

Cable companies also backed USF reforms. The FCC should reduce high-cost support in areas that have sufficient competition, said NCTA. It backed reverse auctions to reduce distribution amounts. “With robust facilities-based competition for voice and non-voice services now a reality, it is unnecessary to maintain the historical levels of funding for the high-cost component of the universal service fund,” it said.

USTelecom urged the FCC to additionally tackle intercarrier compensation, in particular whether VoIP traffic is subject to access charges. That issue “has become increasingly contentious, with companies on both sides unsure of the rules of the road and therefore unable to reasonably project their revenues and expenses,” the group said.

The FCC should remove regulatory barriers to broadband investment, said comment filers. The FCC should tackle “overly restrictive rights of way regulations,” AT&T said. NCTA urged a revised pole attachment rate formula ensuring low costs for broadband providers. The commission should ensure “affordable and nondiscriminatory access to the Internet backbone” for rural incumbents, and revamp video access rules to increase broadband take rates, OPASTCO said. “Market-based reform of retransmission consent, forced tying, ’terrestrial loophole,’ and other video access issues are key components of any broadband strategy.”

The FCC should ensure competitive broadband providers have access to last-mile broadband connections in rural areas, said XO Communications and Nextlink Wireless. The FCC should reject efforts by incumbents to use forbearance “to gain premature relief” from unbundling and other obligations, stop incumbents from “unilaterally” retiring copper loops in local networks and protect competitors’ interconnection rights, they said. The FCC should monitor and regulate incumbent pricing, and remedy a special access market that includes “disproportionately high prices and profits lining the pockets of the incumbents.”

NASUCA said many issues are more complicated than meets the eye in developing a rural broadband strategy. Some issues surrounding the provision of broadband service “pertain specifically to urban areas, and there are issues that apply in both rural and urban areas.” Some rural areas are served by small carriers and some by AT&T, Verizon or Qwest, and a national policy must keep that distinction in mind, the group said. The FCC should also recognize that even though the current universal service support system does not explicitly authorize the expenditure of high-cost program dollars on broadband infrastructure “the rural carriers have used their USF receipts to upgrade their networks.”

The National Rural Electric Cooperative Association said there’s significant interest in rural America in WiMAX and other broadband. “The Commission’s decisions concerning the implementation of a comprehensive broadband strategy will have a profound and lasting impact upon rural communities and the nation as a whole,” the group said.

Wireless Wants In

CTIA said any broadband plan should recognize the role that wireless has to play. Americans want mobile communications, the group said, noting that were some 55 million wireless telephone subscribers in 1997, compared to more than 240 million 10 years later. “The Commission’s broadband planning efforts must not only consider mobile wireless broadband, but also should foster the unique benefits that it brings to consumers and businesses,” CTIA said. “The idea of a third pipe to the home has been overtaken by the consumers’ desires to have broadband to the person, wherever they are, whenever they want access.”

PCIA and the Distributed Antenna Systems Forum said the FCC should remove barriers to wireless buildout, for example, by limiting the amount of time local governments have to make zoning decisions or by working with the states to make the collocation process more efficient. “Wireless deployment, as mentioned, is the most efficient form of broadband deployment in rural, unserved and underserved areas, yet these areas are often the areas of deployment most fraught with delays in the necessary infrastructure siting process,” the groups said.

The MSS/ATC Coalition said satellites also should play a role in reaching unserved areas. The group suggested that the term broadband be defined “in a contextual and evolving manner, rather than choosing a single Mbps-based definition that will soon be out of date.” Rules should also recognize the role satellite systems can play for public safety broadband, it said. “Just as Direct Broadcast Satellite service caused a revolution in television distribution in the 1990s by bringing the most advanced video services to rural and urban areas alike, MSS/ATC networks are expected to bring advanced mobile data services to even the most remote areas of the country,” the group said.

The Satellite Industry Association said the rules the FCC proposes should “emphasize the crucial role that satellite-delivered broadband must play in the development of any viable plan” for meeting the broadband needs of rural America.