O'Rielly 'Suspects' Broadband Speed Increase Will Be Approved
The FCC seems likely to increase the broadband speed requirement for getting Connect America Fund funding, and the agency could increase the amount of E-rate funding, Commissioner Mike O’Rielly predicted in a speech Monday at an NTCA event. O’Rielly also urged the organization to push for USF reform this year so the commission would be able to move on to other issues, like allowing rate-of-return carriers to get CAF support as they want, O’Rielly said. He pledged to “do what I can to push for rate-of-return reform” by summer and called it “a necessary part of meeting our obligation under the statute to ensure that all consumers have access to reasonably comparable services at reasonably comparable rates.”
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O’Rielly's wide-ranging speech expressed concern that net neutrality rules under Communications Act Title II would hinder broadband investment. FTC Commissioner Maureen Ohlhausen also raised concerns about a Title II approach, saying that it would at the least raise “serious legal questions” about the FTC’s ability to enforce Internet privacy and other consumer protection laws because the agency doesn't have jurisdiction over common carriers. She has said that before (see 1409300040).
The FCC’s possible classification of some Internet-based video offerings as multichannel video programming distributors reflects what “seems to be a trend emerging across various proceedings to apply [the Communications Act] to various parts of the Internet,” O’Rielly said. “I am beginning to wonder whether any part of the Internet will be left untouched.” Modernizing regulations, he said, doesn’t mean “subjecting new technologies, services, and applications” to the various titles of the act, O’Rielly said. The Media Bureau recently reopened a proceeding on the issue to ex parte filings, and Chairman Tom Wheeler said the matter was something the FCC may be considering (see 1410220044).
O’Rielly has expressed concerns several times over the USF’s growth, and on Monday said reforming the fund is his second-highest priority after enabling the spectrum auction. To get CAF funding for rate-of-return carriers, O’Rielly said it would be in NTCA’s “best interest” to “push the commission to complete broader CAF reforms.” If the commission "is able to wrap up the challenge process and all other decisions needed to make offers to the price-cap carriers by the end of this year, and can finalize the rest of the decisions needed for CAF Phase II in early 2015, then the commission will have no reason to further delay a CAF for small carriers,” O’Rielly said.
Speaking of the agency’s need to adapt to changing technologies, O’Rielly said “old rules” should be revised if they “are frustrating federal USF policy.” He cited a prohibition on carriers receiving support if they offer VoIP on a common carriage basis bundled with broadband.
On increasing broadband speed requirements, for which the agency has issued a notice of inquiry (see 1408060033), O’Rielly said, ” I suspect” the commission will decide to increase the speed requirements for CAF from 4 Mbps download and 1 Mbps upload to 10 Mbps and 1 Mbps. That would raise the question of how to reach rural customers, he said. Because rate-of-return carriers are required to build out only to areas under “reasonable request,” increasing the speed requirement would mean “more of your territories may be deemed uneconomic to serve,” O’Rielly said. To reach the customers who’d be left out, O’Rielly asked if the carriers would be willing to gradually upgrade even uneconomic areas with the eventual goal of reaching 10/1. “If you can't provide 10/1 in those areas, will you plan to serve them at 4/1?” he said. “Are you willing to partner with other providers to offer service on a transitional basis until you are able to fully serve them in the future?”
On E-rate, O’Rielly said he disagreed with the emphasis in the commission’s order earlier this year (see 1407140044) on increasing Wi-Fi connections within schools and libraries and said rural schools and libraries are primarily concerned about getting broadband connections to them. He said he’s “not sure” the commission will stay within the current E-rate budget, “which is problematic for me.”
O’Rielly said he has to “part ways” with NTCA on basing net neutrality regulations for the transmission component of broadband on Title II, saying that "just as you judge USF reforms on whether they will negatively impact your investment, I have to consider whether net neutrality proposals will chill access to capital and broadband deployment. I am extremely concerned that applying Title II to any part of broadband or the Internet will have this effect.”
A Title II approach with forbearance would mean “guaranteeing that there will be protracted legal fights both at the FCC and in court,” O’Rielly said. He said that Title II proponents are including forbearance “proves that this is all just an end-run around the statute. It is frustrating because I support forbearance and we will wreck it as a viable tool if we continue to abuse it.”
“It is crucial for our members to hear first-hand from federal policy-makers when it comes to the issues affecting the industry and the ability of community-based operators to deliver robust and affordable advanced services to rural America,” NTCA CEO Shirley Bloomfield said in a statement. Net Neutrality Title II proponents declined to comment on O'Rielly's remarks.