New Funding for E-rate, EBB Helps Shore Up USF -- for Now
The FCC's recent infusion of money from Congress will likely help millions of students and low-income households stay connected during the pandemic, experts said in recent interviews. They said the commission must overcome longstanding institutional barriers to find a solution to shore up USF financially over the long haul (see 2102010059).
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The $3.2 billion emergency broadband benefit program and $7.17 billion in E-rate funds from recent stimulus packages (see 2103100065) are helpful, experts agree. This EBB and E-rate money injection doesn’t decrease money being spent on Lifeline and E-rate, said New Street’s Blair Levin. “It certainly doesn't replace any money being spent on rural deployment.” The temporary funding is "not intended to be a long-term solution” but lays the groundwork for one, he said.
FCC acting Chairwoman Jessica Rosenworcel said in a statement she's “glad that Congress has made internet connectivity a priority in both COVID relief packages, and has entrusted these funds to the FCC to provide help to struggling households and overburdened schools, schoolchildren, and families. For now, we are focused on the task of administering these new programs in accordance with the law.”
E-rate and Lifeline need reform, and EBB "damages the integrity of the [Lifeline] program," said Conexon partner Jonathan Chambers. The FCC "does its best," but the short-term infusion of funds "diverts their attention" from revising Lifeline, he said: The additional cash "just indebted the long-term prospects for our children."
It’s “kind of like putting the cart before the horse,” said Fiber Broadband Association CEO Gary Bolton. The new funding “puts less stress on USF, but it really comes down to infrastructure,” he said: “Without building that foundation, it makes it challenging” to keep students and low-income consumers connected. The challenge is “when you get into whether the FCC has the authority to use broadband as a rate base," Bolton said
“Universal service now has so much pegged on it, and yet it’s built on a system that’s pretty antiquated” and "doesn’t necessarily take into account who is benefiting,” said NTCA CEO Shirley Bloomfield. Rosenworcel can be a “very interesting player” in reform efforts if chosen as permanent chair because she's “probably one of the most well-versed policymakers anywhere" on USF, Bloomfield said. The FCC has the expertise and models and can offer a road map, Bloomfield said. “If the FCC were willing to say it’s tied together and come out with some leadership on that, that would be huge.”
Former FCC Chairman Ajit Pai told us during his final days in office that USF reform would be the FCC’s next major challenge (see 2101120066). Levin said it was “institutional malpractice” for the commission not to start proceedings last year to ask what the minimum standard should be for broadband or what to do about the rising USF contribution factor. “That’s like a doctor having seen the tests and knowing that the cancer has gone from stage 1 to stage 2 to stage 3, and when it gets to stage 4, the doctor is retiring [and] saying, ‘Yep, some other doctors really have to deal with the patient.’”