Industry Seeks Fewer Obligations Amid Funding Influx

Commissioner Chris Nelson isn’t convinced eligible telecom carrier (ETC) designation is no longer necessary, the South Dakota Republican said at NARUC’s winter conference Tuesday. Telecom association officials on Nelson’s panel said Congress sees that the ETC process has run its course. Nelson and a District of Columbia consumer advocate raised concerns about possible impacts to service quality as telcos abandon state-regulated copper networks.

Congress didn’t require winning bidders to be ETCs to access funding from recent grant programs including NTIA’s broadband, equity, access and deployment (BEAD) and the U.S. Treasury’s Capital Projects Fund, noted USTelecom Vice President-Policy Diana Eisner. “In Congress’ sense, ETC has sort of taken care of itself in a way, where there isn’t really the need for it anymore.” Congress has “thrown billions of dollars at this problem through a completely different regime,” agreed Alex Minard, NCTA's lead legislative counsel. “In neither [the American Rescue Plan Act (ARPA)] nor BEAD do they have an ETC requirement.”

Nelson pushed back. ARPA and BEAD may not have established an ETC requirement, “but we are years away from knowing whether or not that’s going to have any negative implications,” the commissioner said. “What we do know is that in the case of [Rural Digital Opportunity Fund (RDOF)], which did come with ETC obligations, there were states that were able to do very deep dives on some of these companies and determined that they were not capable of doing what they had told the FCC that were going to do.” The NARUC Telecom Committee approved an RDOF resolution Monday (see 2302130050).

States helped flag bidders who couldn’t fulfill RDOF obligations, agreed Minard, but the FCC later identified the same issues through its long-form review process. States, which ultimately will be in charge of awarding BEAD grants to providers, will have the ability through their application processes to vet bidders, he said. States got more responsibility through BEAD than they had with the FCC’s RDOF process, he added. Eisner agreed: "If done right, the states will know at the onset whether these bidders are qualified, even without ETC."

Industry panelists agreed states played a valuable role vetting, Nelson told us afterward. “They’re just quibbling on whether it ought to be through the ETC mechanism or something else.” State commissions “have a successful track record of using the ETC mechanism to protect taxpayer and universal fund dollars. … That ought to be maintained and leveraged every time these dollars are going out.” While BEAD and ARPA lack ETC requirements, Nelson said “an additional level of commission oversight would help ensure that we don’t have any problems going forward.”

States’ gatekeeper role is important, but don’t let it morph into service regulations, said panelist Ben Aron, CTIA assistant vice president-state regulatory affairs. Smartphone prices dropping 20% and wireless service rates declining 1% last year shows great competition in the mobile market, said Aron, citing a CTIA annual report. Minard also cautioned against adding regulations: “In a competitive environment, you have to be careful about where you put the regulatory obligations.”

“Being a public carrier means having public obligations,” said Thaddeus Johnson, assistant people’s counsel for the District of Columbia. Seniors and rural communities still rely on landlines and mustn’t be left behind by carriers seeking to end copper service, he said. "No one is trying to turn back the clock," but it's important to do copper retirement "in such a way that is not painful for consumers."

Let incumbents automatically relinquish ETC status and its obligations if the government funds a competitor in the same area, Eisner said. “We’re very concerned about the BEAD funding resulting in this very inequitable situation where you have a copper network that they completely overbuilt,” but the incumbent “still has to stay there and maintain the network.”

Nelson asked what service-quality protections would remain for consumers if states allow telcos to abandon legacy networks. They would still be covered by consumer protection laws, contracts and FCC mechanisms, said Eisner. Most states have unfair, deceptive and abusive practices laws, said Aron. Wireless is regulated at the federal level, but carriers answer when state commissions call, the CTIA official added: “We keep that line open.”

NARUC Notebook

Keep the affordable connectivity program (ACP), urged provider and consumer representatives on a NARUC panel Tuesday. ACP at first was projected to run out of funding in mid-2024, but with the program’s great success, Cox fears it could happen year-end 2023, said Ilene Albert, executive director-broadband affordability and digital equity programs. The sooner ACP gets more funding, the better, she said. "We want to continue investing in making the program better,” but Cox needs “some type of guarantee that the program is going to be here tomorrow.” TruConnect Chief Compliance Officer Danielle Perry said federal policymakers acknowledge ACP will run out of money, but she hasn’t seen any action. The Greenlining Institute worries what will happen if funds run out, said Program Manager Caroline Siegel Singh. ACP greatly helped get people IT and other jobs in Oakland, she said. It brought home internet access to households that wouldn’t have had it otherwise, especially in Black and Latino communities, she said. NARUC members seeking to get more residents signed up should ensure their states connect eligibility databases to the national verifier, said National Consumer Law Center Staff Attorney Olivia Wein.