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NARUC Mulls RDOF Lessons

Manchin Hopes Congress Can Fund ACP Soon

Sen. Joe Manchin told us Tuesday he supports Congress allocating funding for the FCC's affordable connectivity program (ACP). "The money's there," but congressional leaders must "get the bill on the floor," the West Virginia Democrat said after a speech at the NARUC meeting in Washington. Later, a NARUC panel said states should learn from Rural Digital Opportunity Fund (RDOF) problems when setting rules for internet service providers to participate in the broadband, equity, access and deployment (BEAD) program.

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The potential government shutdown has “held up” ACP funding, Manchin said after a NARUC keynote that largely focused on energy issues. “As soon as we get through that, the funding programs and all that should go through. That’s what we’re hoping for.” Manchin said, “Connectivity is the whole thing and we all know that, especially in rural America.” Industry officials on a Monday panel urged NARUC commissioners to press Congress to include stopgap ACP funding in an imminent spending bill (see 2402260071).

The 118th Congress is the “worst performing Congress that you’ve ever, ever seen,” Manchin said during his keynote. Congress normally passes more than 500 bills in each two-year cycle, but has approved only 39 so far, he said. The senator blames this on weaponized politics in which the parties treat each other as enemies rather than opponents. As a result, extremes on both sides have taken control, he said. “We’ve got to be able to show the strength of the centrist middle.”

South Dakota Commissioner Chris Nelson (R) had “great hopes” that RDOF would connect everyone in the state, “and then it just kind of blew up on us,” the Public Utilities Commission member said during a Telecom Committee panel Tuesday. “It filled out a few census blocks but not much more than that.” Now the state hopes BEAD will finish the job, but Nelson wonders how much more vetting should be done to avoid issues South Dakota had with RDOF winner LTD Broadband, he said. The PUC in 2022 denied the company’s request for eligible telecom carrier designation (see 2210110054). Nelson said he heard NTIA might not let states conduct enough BEAD prequalification to avoid similar problems.

NTIA set some parameters for states, said Virginia broadband office Director Tamarah Holmes. But she is worried states with less broadband grant experience than Virginia might set overly burdensome rules that discourage participation. “I don’t know how much time everyone has to sit back and really think about the needs of their providers … and what’s reasonable in terms of pre-qualification,” she said. “While I’m able to breathe and take my time and talk to my ISPs about what is realistic, not everyone will be able to do that.”

Virginia and others "that have had the benefit of having a state-run program are going to be better equipped to manage this BEAD process,” agreed consultant Carol Mattey, a former FCC official. “I worry for the states that only now have really established broadband offices and haven’t had the opportunity to develop” relationships with providers. Mattey encouraged openness. “The more that states can do to be transparent about their expectations in the application process and to require service providers to be transparent once they’re awarded funds as to what their build plans are,” the less citizens will be frustrated about the progress of deployment, she said.

As states consider prequalification requirements, "we want to see something better than RDOF but not so significantly burdensome" that it deters participation, said NTCA Executive Vice President Mike Romano. With RDOF, the FCC did most vetting on the backend, after winners were selected. But Romano warned not to swing the pendulum too far so that there is too much upfront vetting. The balance must be “just right,” he said.

States should be transparent about BEAD requirements upfront, said Lerman Senter’s Stephen Coran, an attorney who has worked with wireless ISPs. The “table stakes” for participating are important, he said. Coran raised concerns with some states that plan to require five years of financial statements. That’s something large phone and cable companies can provide, “not smaller companies that don’t pay 50 grand a year to have their books audited by a CPA.” Such gating criteria could lead to some areas not being funded, he warned.

States will continue to have some ability to regulate telecom companies if the FCC reclassifies broadband as a Title II telecom service, supporters and opponents of net neutrality rules said on another NARUC panel Tuesday. However, they disagreed how much power states should wield.

The FCC cannot manage all that it needs to manage” on its own, said Public Knowledge Senior Vice President Harold Feld. Particularly with resiliency and universal service issues, “that is where states play a very important role.” While national policies are needed at times, “there are also going to be a lot more times when you are going to need people who are on the ground and close to the people who need protection.”

The FCC NPRM's final version was “ambiguous” about whether federal rules would preempt states, said Daniel Lyons, professor at Boston College of Law. Unlike an earlier version that more clearly contemplated preempting states, the final NPRM asked if preemption was necessary. Lyons said that seems to “open the door to state laws that go above the federal minimum.” Whatever is decided, the FCC can’t preempt states from regulating purely intrastate services or terms and conditions of wireless companies that go beyond market entry and rates, he said.

States could continue overseeing intrastate services and enforcing generally applicable consumer protection principles like false advertising, said Wiley attorney Tom Johnson, who was general counsel under former FCC Chairman Ajit Pai. But failing to expressly preempt states from making “conduct rules on internet service providers … undermines the core open-internet case for federal regulation,” he said. “I don’t see the policy case for declining to set [federal rules] as a ceiling.”

California’s 2018 net neutrality law might be why internet providers behaved after the FCC rescinded its open internet rules, posited Free Press Vice President-Policy Matt Wood, noting that California is a state that wields national influence. However, Wood said a “strong federal floor … is to everyone’s benefit” and he’s “less concerned” about the consequences of preempting states, since he mostly views broadband as an interstate service.

It should be Congress that decides how broadband is regulated, panelists agreed, but they doubted lawmakers will act soon. Massachusetts Department of Telecom and Cable Commissioner Karen Charles asked about how to encourage Congress to untangle the “quagmire” of legal questions around the issue. Feld replied, “I wish I knew.”