Latta, Thune Undecided on ACP Future; House Subpanel Eyes Fed Broadband Changes

The GOP leads on the House and Senate Communications subcommittees were noncommittal in interviews before a Wednesday House Commerce Oversight Subcommittee hearing about what kind of modifications they would like for the FCC’s affordable connectivity program. Current estimates peg ACP as likely to exhaust the initial $14.2 billion in funding from the 2021 Infrastructure Investment and Jobs Act during the first half of 2024, perhaps as early as Q1. The Commerce Oversight hearing highlighted partisan fault lines over how much Congress should modify the existing federal broadband funding apparatus.

“We’ve got to know exactly what the FCC is doing” with the ACP money before lawmakers decide whether to allocate more money to the program once the IIJA funding runs out, House Communications Chairman Bob Latta, R-Ohio, told us. He and Senate Communications ranking member John Thune of South Dakota signed a Monday letter in which Republican leaders invoked a debate over ACP’s future as a reason they sought an FCC Office of Inspector General review of the commission's management of broadband money it received during the COVID-19 pandemic (see 2305080067). OIG’s response is due June 1.

“We have to make sure taxpayer money” for ACP “is being spent wisely,” so the FCC OIG’s eventual response to the Republicans’ letter will be critical to determining future legislative action, Latta said. “Getting a full accounting” of ACP disbursals will be important, Thune said: “There’s been a lot of dollars put in the pipeline” for that and other programs, but “as far as we can tell” there’s been “very little accountability. Hopefully, we can get those answers and then figure out what the next steps are.”

Verizon believes “Congress needs to develop a plan to keep the ACP program funded while developing long-term reforms to current broadband subsidy programs to ensure they operate efficiently, avoid duplication, and target funding to those who need it most,” said Kathleen Grillo, senior vice president-public policy and government affairs, in a Tuesday blog post. Comcast Executive Vice President-Public Policy Broderick Johnson warned Wednesday “we can’t ignore the looming ACP funding cliff” and said it’s “time for a bipartisan Congress and the administration to once again act and solve the affordability question once and for all, before it’s too late."

GOP Criticism

House Commerce Oversight Republicans say changes to the federal government’s structuring of broadband programs are potentially necessary due to what they see as waste and misuse of existing money, a lack of sufficient Biden administration oversight of that spending and overlap among programs across 15 involved agencies. Latta told us he hoped to be in the hearing given his role as Communications chairman but said he had a potentially busy Wednesday schedule. Commerce Oversight Democrats defended the Biden administration’s disbursal of broadband funding, including $65 billion in IIJA money, and faulted congressional Republicans for seeking to cancel out some connectivity funding as part of proposed spending cuts in the Limit, Save, Grow Act (HR-2811) to raise the U.S. debt limit.

“Millions of Americans still lack access to fixed broadband services, despite our federal government spending tens of billions of dollars on broadband-related programs over the years,” said House Commerce Committee Chair Cathy McMorris Rodgers, R-Wash. Instead of “simply assuming the solution is spending more money and standing up new programs, we need to step back and take a hard look at how we’ve spent the funds we’ve already invested and what lessons we can learn,” she said.

“Within the many federal programs relating to increasing broadband access there is potential for overlap, duplication and conflicting messages,” said House Commerce Oversight Chairman Morgan Griffith, R-Va. “I would submit that a national” broadband strategy the GAO recommended last year (see 2206010068) “is necessary and strong leadership to coordinate all of these agencies’ spending on broadband access is needed.”

Griffith and other House Commerce Oversight Republicans found strong backing for their position in testimony from Phoenix Center Chief Economist George Ford, who advocated “existing broadband subsidy programs should be merged when they serve a similar purpose, and agencies with a history of poor decision-making should be left out of the consolidation.” The existing apparatus is “an enormous waste of money,” he said.

GAO Director-Physical Infrastructure David Von Ah noted federal broadband spending remains “fragmented and overlapping.” He told lawmakers NTIA in response to GAO's 2022 recommendations on federal broadband coordination “plans to provide a report to Congress by May 31, 2026,” which will “identify barriers and statutory limitations that limit the beneficial alignment of broadband programs and offer potential legislative changes.”

ACP and other federal programs “are already increasing internet connectivity for millions of Americans,” but bridging the digital divide “is a complex challenge” and “there is no one-size-fits-all solution,” said House Commerce ranking member Frank Pallone, D-N.J. “We are going to hear a lot of fear and negativity about these investments from” panel Republicans “even though they have been talking for years about the need to expand broadband access in their districts. The investments they opposed will do just that.”

Pallone warned HR-2811, which the House passed in late April on a narrow 217-215 vote, “would undermine our ongoing efforts to close the digital divide.” The measure “would claw back unobligated funding for Tribal broadband, students’ internet connectivity, and accurate broadband mapping that is so critical in ensuring that we are deploying broadband where it is needed most.” He later tweeted that the measure “takes back unobligated” funding for the FCC’s Secure and Trusted Communications Networks Reimbursement Program, “undermining the program and putting our networks at risk.” FCC Chairwoman Jessica Rosenworcel and others are pressing Congress to appropriate an additional $3.08 billion to fully reimburse program participants (see 2305040085).

USF Implications

House Innovation Subcommittee ranking member Jan Schakowsky, D-Ill., praised ACP during the Commerce Oversight hearing and eyed whether “Congress needs to go further in passing legislation in making serious advances” in improving broadband affordability. National Digital Inclusion Alliance Executive Director Angela Siefer responded that USF’s “contribution mechanism needs to be figured out” and lawmakers could consider placing ACP within USF’s auspices. She cautioned that can’t happen quickly since work on a USF revamp will be complicated. Congress should consider temporarily extending ACP as an independent program because a “longer-term solution” won’t be possible if “ACP just stops,” Siefer said.

Senate Commerce Committee ranking member Ted Cruz, R-Texas, asked GAO before Senate Communications’ planned Thursday hearing on a potential USF revamp to give him an updated assessment of the fund’s administration. USF “has become increasingly burdensome for consumers since the Fund was first established two decades ago, due to both exponential growth in USF spending levels and a shrinking revenue base,” Cruz said in a Wednesday letter to U.S. Comptroller General Gene Dodaro. “It has also been plagued by reports of waste, fraud, and abuse since its inception.”

The Universal Service Administrative Co. “has shielded the FCC from accountability for skyrocketing USF fees.” Its “operations lack transparency, and there has been virtually no oversight into USAC’s ever-increasing overhead costs, even though American consumers ultimately foot the organization’s bill,” he wrote: It’s “far from clear that USAC’s Board of Directors possesses the independence, competency, or fiduciary duties necessary to ensure USAC is acting in ratepayers’ interests.”

USAC also “has a history of poor performance” that GAO, the FCC and lawmakers have “repeatedly” noted over recent years, Cruz said. The entity and the FCC “have yet to implement” a series of GAO recommendations on the Lifeline, High Cost and E-rate programs dating back to 2017. Cruz wants GAO to report back by Nov. 10.