FCC's USF Report Seen as Breaking Little New Ground

The FCC’s report to Congress on the future of the USF, released Monday (see 2208150048), contained more questions than answers, industry experts said Tuesday. The 65-page report has few broad conclusions on the future of USF, declining to adopt competition as a separate goal or to set a separate deployment goal targeting mobile broadband. It weighs against assessing a fee based on broadband internet access service (BIAS).

“We disagree with criticisms that our proposed goals are too broad,” the report says: “We also decline to expand the goals beyond those we proposed as we believe the adopted goals suitably capture the necessary objectives of the universal service programs.” There’s no need to set competition as a separate goal, the report argues. “Our existing goals of affordability and equitable access will further competition.”

CTIA is right that mobile broadband is important, the FCC says. “We find it unnecessary to embrace a goal focused only on mobile deployment, and we likewise believe that our goals of deployment and availability necessarily encompass deployment and availability of both fixed and mobile broadband,” the report says. CTIA didn’t comment.

“Rather than make concrete recommendations, the Report largely suggests future FCC inquiries,” said New Street’s Blair Levin in a Tuesday note to investors: “In what we think is the most material question going forward -- the low-income subsidy program -- the report recommends that the Commission ‘initiate a rulemaking to evaluate how the Lifeline program can best operate with the Affordable Connectivity Program (ACP) and examine lessons learned from implementation of the [emergency broadband benefit] Program and the ACP that may be able to be applied to Lifeline.’” In short, Levin said, “rather than push for specific policies, the Report lays out a number of issues the Commission should address, most of which have been kicking around the FCC for some time.”

“My initial impressions are that it demonstrated what we already know,” Digital Progress Institute President Joel Thayer told us. “The report makes clear that the current contribution mechanism is untenable, and the FCC needs to find ways in which to refill the coffers,” he said. The report says “reassessing BIAS for USF contribution would either make matters worse or do very little at all to resolve the issue,” he said: “The FCC may now have more empirical data to evaluate contributions from big tech given that their business models are the greatest beneficiaries of broadband deployments. If the FCC doesn't change its methodology then USF will continue to be a regressive tax ironically hurting the ones it intends to serve.”

“The FCC report correctly identifies broadband universal service goals to be universal deployment, affordability adoption, availability and equitable access,” and recognizes “that as circumstances change, the programs must adapt,” said National Association of State Utility Consumer Advocates Telecom Committee Chair Regina Costa: NASUCA applauds federal efforts to jumpstart deployment, but “it is well past time to address universal service contributions reform and enact measures to ensure sustainable support if we are to accomplish the goal of ensuring equitable, affordable access to broadband throughout the country.”

Incompas CEO Chip Pickering said the FCC missed an opportunity by not adding broadband revenue to the contribution base. “The USF program is on life support, and the FCC missed an opportunity to provide a simple and immediate solution to help save it," Pickering said: Including broadband is a “common sense solution, that can and should be taken today, that will help ensure millions of low-income individuals, rural families, and small businesses preserve the ability to connect to voice and internet services they desperately need.” Pickering said it’s now up to Congress to act. “We strongly encourage bipartisan leaders to stand with consumers and creators and reject monopoly ISP efforts to raise prices on streaming competition that has brought more choice and lower prices for hundreds of millions of American families,” he said.

“As more grant programs are established to deploy broadband networks, we cannot forget that it is equally important to sustain those networks once they are deployed and keep services affordable,” said NTCA CEO Shirley Bloomfield.

The DOJ Antitrust Division, meanwhile, filed comments Tuesday in docket 21-455, on the FCC’s proposed centralized online competitive bidding portal for the E-rate program (see 2204280051). “The Division supports the Commission’s proposed rules requiring both service providers and applicants’ real-time submission of pre-award bid and bid-selection documents through the proposed portal,” DOJ said: “Use of the portal as the hub of E-Rate’s competitive bidding process will ensure these documents remain unaltered and available to auditors and investigators, who can access the documents without the need to involve applicants.” DOJ said “the threat of altered bid documents is real.”