ACP Funding Seen as Victim of Broader Congressional Logjam

LONG BEACH, Calif. -- The Affordable Connectivity Program enjoys general bipartisan support in Congress, but it's soft support, with ACP's looming lack of funds still not rising to the level of lawmakers' top priority, said Angelina Panettieri, National League of Cities legislative director-technology and communications, at NATOA’s annual conference Thursday. Several speakers urged localities to be active in weighing in on states' broadband equity, access and deployment (BEAD) program plans, especially with advocacy on the challenge process design. "This is a zero sum game” since an inappropriately targeted BEAD subsidy means less money for areas with real needs, said Brian Roberts, policy analyst-city and county of San Francisco.

Panettieri told us later that ACP's challenge is competition from higher congressional priorities such as omnibus funding bills and lack of a speaker of the House. If the congressional logjam breaks, ACP "goes with it," echoed David Don, Comcast senior vice president-public policy. ACP is driving net additions in broadband subscribers and sustaining service for low-income households, and the program's end will mean “net addition” households in particular will likely suffer ”a hard and steep fall,” said John Horrigan, senior fellow-Benton Institute for Broadband & Society.

Don said the FCC's net neutrality draft NPRM lacks economic justification for regulation of broadband provision, and instead is predicated on other items, like giving the agency regulatory muscle to tackle issues such as privacy and cybersecurity. He argued broadband provision, because of increasing competition, is "more like the grocery store" than a utility, and regulation could harm that competitive marketplace. He forecast that by 2030, average fixed broadband speeds available to consumers would be 2.5 Gbps, compared with around 225 Mbps today.

Any BEAD proposal short of 100% of coverage will be denied, though that coverage needn't be solely fiber, said Susan Walters, NTIA regional director-West. “There is a balancing act” in making areas attractive to ISPs but not necessarily letting those ISPs dictate the choosing of locations, she said. With BEAD money ultimately going to ISPs, localities need to have a relationship with them and understand what their lanes are and potentially use local funds to support them, said Karen White, vice president-national broadband practice, Michael Baker International, a construction engineering firm. Localities also could put pressure on ISPs on improved service for public housing and multi-dwellling units, added Walters.

Walters said numerous states' draft BEAD plans focus solely on infrastructure and the agency is urging them to include a digital equity component -- at least to ensure that if the state ends up with money remaining after its infrastructure work, that surplus doesn't have to be returned.

As localities deal with declining franchise fees due to cord cutting, speakers Wednesday cited Austin and Illinois as enjoying some alternatives to traditional cable franchise fees. Austin’s franchise agreement with Google Fiber for its use of city rights of way to provide broadband network services takes effect in mid November, said Rondella Hawkins, city telecommunications and regulatory affairs officer. No other operators for now are doing strictly broadband-only service in Austin, she said. Stu Chapman, president of localities consultancy Municipal Services Associates, said some Illinois communities are trying to replace declining franchise fees with amusement or entertainment taxes. Illinois’ HB-3808, which takes effect Jan. 1, blocks video service providers from including streaming services as part of their gross revenue, which is part of how franchise fees are calculated. But it raises the question of when cable operators start reselling streaming services, if revenue from those services will similarly be cut out, he said.

A variety of states have instituted fees or taxes on streaming providers, including Florida, North Carolina and Washington, while New York and Massachusetts have proposals to do so, said localities lawyer Brian Grogan of Moss & Barnett.