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Setting the Bar for Public Funding: A New Broadband Goal for the Connect America Fund

By: Carol Mattey

The Federal Communications Commission recently concluded in its 2018 Broadband Deployment Report that broadband is being deployed to all Americans in a reasonable and timely fashion, but there’s more work to be done. 

The report finds that 24 million Americans – the vast majority of which are in rural areas – don’t have access to fixed broadband with speeds of 25 Mbps downstream/3 Mbps upstream, a service that is sufficient for multiple devices in the home to stream high definition video and make video calls. An equally notable statistic, buried in the report, is that 10 million rural Americans don’t even have access to 10 Mbps downstream/1 Mbps upstream broadband.

The report also presents information on consumer adoption in areas where such services are available: nearly 57 percent of urban Americans subscribe to 25/3 Mbps or better fixed terrestrial broadband, and 71 percent subscribe to 10/1 Mbps or better fixed terrestrial broadband.

So, what is the government doing to provide the same opportunities for digital inclusion to rural Americans?  How much longer will it be for rural Americans to have access to services that urban residents take for granted? 

The report summarizes a variety of actions taken and on the horizon that the FCC believes will improve the level of broadband deployment. I’ll focus here on only one: the Connect America Fund.

For decades, the FCC has provided billions of dollars annually in subsidies, largely to incumbent telecommunications carriers, to ensure universal service.  In 2011, the FCC reformed its existing universal service fund (USF) program for phone service in high-cost, rural areas, creating the Connect America Fund to provide funding to service providers willing to deploy broadband by defined milestones.

Back then, the FCC adopted a performance goal for the Connect America Fund of ensuring “universal access” to fixed broadband and concluded it would measure progress towards this outcome based on the number of newly served locations – but it did not articulate any concrete vision for when this universal service goal might be achieved.

I would suggest that it’s time to set a specific, actionable goal for what the nation is seeking to accomplish with the Connect America Fund so that we can measure progress against that goal. And it’s time to set a realistic target date for meeting specific broadband deployment goals in rural America, so that we can honestly evaluate whether additional steps are necessary. Is it just a matter of years before recipients of USF support will complete deployments that will provide rural Americans with decent opportunities to join our modern digital world, or will current plans for the Connect America Fund fall short?

The Connect America Fund is complicated, with various sub-components that impose differing requirements on different providers.  Most funding today goes to incumbent telecommunications carriers, but the FCC plans to hold auctions in the future to award support on a competitive basis.  Support only is available in certain high-cost areas of the country, and less than 20 million people live in the areas of the country that qualify for funding. If current recipients meet their required deployment mandates, in time, roughly [#] million Americans will have 25/3 Mbps fixed broadband availability, and [#] will have 10/1 Mbps fixed broadband availability.

But broadband is not assured for all that live in the areas supported by the Connect America Fund.  In some areas, broadband is provided upon “reasonable request” – and the recipient of support is the one who decides whether anticipated revenues (from both customers and the government) are sufficient to justify the cost of network upgrades. In other areas, whether consumers will end up with service will depend on the outcome of auctions for funding that have yet to occur. 

It’s time to revisit what we’re aiming to accomplish with the Connect America Fund. Some would say the goal is 10/1 Mbps fixed broadband.  I would suggest that’s setting the bar too low.

Here’s a strawman to get the conversation going: nationwide, the Connect America Fund should ensure 10/1 Mbps fixed broadband service for 3 million Americans – roughly one percent of the country. This should be the minimum for the most expensive areas of the country to serve.

The remaining Americans served by the Connect America Fund should have access to service comparable to what a majority of urban consumers choose: 25/3 Mbps fixed broadband.  We shouldn’t be settling for 10/1 Mbps across the board – a service that does not adequately support high bandwidth activities for multiple users in the same home.  

And finally, with the exception of truly remote locations like distant islands and the deep wilderness, no consumer should remain on the reasonable request standard.

It’s time for the FCC to set a deadline for universal broadband and figure out what needs to be done to make it happen. Universal service isn’t truly universal if millions of Americans don’t have it. 

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