Section 706 Draft Item a Notice of Inquiry; FCC 'Reset' May Skip Report on Last Inquiry

A draft FCC item on advanced telecom capability deployment is a notice of inquiry, a spokesman told us Friday. Chairman Ajit Pai in January withdrew a draft report on broadband-like ATC deployment under Telecom Act Section 706 (see 1701300058), which previous Chairman Tom Wheeler had circulated to conclude an inquiry begun in 2016. "It sounds like this is a reset, and they're basically going to skip a report," said an informed source.

Section 706 requires the agency annually to determine if ATC is being rolled out in a reasonable and timely way to all Americans, and if not, to take immediate steps to promote deployment by removing barriers to infrastructure investment and promoting telecom competition. If the FCC were to issue a new report by December, it would meet the annual mandate since its last report was in January 2016. But some parties told us lawmakers could give the commission some leeway on timing, particularly in light of the transfer of power from Democratic to Republican control.

The Democratic-run FCC found ATC was not being deployed adequately to meet the mandate, a conclusion it cited in adopting its 2015 net neutrality and Title II broadband reclassification order under the Communications Act. It again reached that conclusion in its 2016 report, which also found ATC is similar to broadband but not the same (see 1602010038). Pai concurred on the report and said it showed the then-FCC and Obama administration had failed in their broadband efforts, despite much USF support and stimulus spending. Democrats used the mandate "expansively," said Will Rinehart, American Action Forum director-technology and innovation policy.

“My best guess is this current commission would objectively look at the facts in the record and conclude that for much of the country, the advanced services are being made available on a reasonable and timely basis, although there are still areas where we need to continue to make progress," emailed Adtran outside counsel Stephen Goodman of Butzel Long. "I would distinguish that from the previous administration, where they would cherry pick the record and move the goal posts to support their preordained conclusion of a negative answer to the question the Congress asked in Section 706, because they relied, in part, on a negative Section 706 determination for authority to adopt the Open Internet rules.”

"The next 706 Report will likely emphasize removing government-created barriers to infrastructure investment and identifying ways to streamline or reduce federal or state regulations that inhibit investment," emailed Free State Foundation Senior Fellow Seth Cooper. "Under Chairman Wheeler, the FCC was more focused on imposing new regulation to deal with what it perceived to be marketplace barriers. But a majority of the Commission now appears to recognize that broadband market conditions are dynamic and competitive -- and therefore the market is favorable to investment. Going forward, I expect Chairman Pai to direct attention to investment barriers posed by government rules, including those related to spectrum auctioning and licensing, wireless infrastructure siting, maintaining legacy telephone networks, as well as public utility regulation of broadband Internet access service.

A Pai effort to improve rural broadband could include "leveraging other programs, such as First Net and E-rate, by changing the way subsidies are structured, by promoting fixed location LTE, by applying the recommendations of the [Broadband Deployment Advisory Committee], and yes, even by increasing subsidies," emailed Richard Bennett, network architect.

"My guess is the next report will find deployment occurring in a reasonable and timely fashion, though it’s unclear what carving out rural America and tribal reservations achieves, if they end up doing that," Rinehart emailed. "Section 706(a) already gives the agency clear authority to encourage deployment in rural areas and tribal lands. Section 706(b) just adds an element of immediacy, which likely matters for mandamus petitions. Still, the administration is already engaged in the effort to expand rural and tribal broadband."

Pai offered clues in criticizing the 2016 NOI that promised to follow "a predictable script that meets a preordained goal" of a negative finding. "This sham is a shame. We should treat this proceeding as an annual status report on our efforts to promote digital infrastructure," he said of the NOI. "What regulatory obstacles stand in the way of investment, innovation, and entrepreneurship and how can we get rid of them? We don’t need more lip service to the 'stark discrepancy' between broadband in rural and urban America -- we’ve said that all before. Instead, we need concerted action to make good on the promise of universal service once and for all."

New America's Open Technology Institute and the Competitive Carriers Association, both of which were supportive of the Democratic policies, were among those that didn't comment.