Sen Klobuchar and Rep Peterson talk rural broadband and farm bill in Detroit Lakes MN

The Duluth News Tribune reports

U.S. Sen. Amy Klobuchar and U.S. Rep. Collin Peterson met with about a dozen Internet service providers in Detroit Lakes on Friday, Feb. 24, to help solve a nagging problem—how to get high-speed Internet service out to everybody, even rural areas where there is only one home or farm every mile or two.

One possible solution—put funding for it in the new Farm Bill, which would cut red tape, simplify the regulatory and funding process, and put the focus on rural areas where the need is greatest.

They have a plan to get the idea rolling…

About $230 million in federal money has gone to Minnesota for broadband, versus about $35 million in state money, so the federal effort has not been unsubstantial, Klobuchar said. But a sustained effort is needed, with a steady funding source.

Klobuchar will recruit six senators who are focused on rural issues, while Peterson will recruit six similar House members, and the group will work with industry experts to thresh out a feasible funding plan.

Area broadband providers gave their thoughts too..

Mark Birkholz, director of southern markets for Arvig Communications, and Gary Johnson, CEO and general manager of Paul Bunyan Communications in Bemidji, were among a half-dozen or so service providers and others who met with Klobuchar and Peterson at the Detroit Lakes Library.

They had high praise for the Minnesota state agency that works with broadband but not so much for federal agencies.

Federal money is capped and often comes with so much regulatory requirements that an additional staffer must almost be hired to deal with it all, Bickett said.

A big problem is that federal funding from the Universal Service Fund is largely tied to taxes on landline telephones, which are fading away as cell phones take their place. Logically, Internet taxes would replace landline taxes, but there is such fierce sentiment in the U.S. House not to “tax the Internet” that it’s politically difficult to make that switch. …

Federal funding also penalizes Internet service providers if they provide service outside their specific areas, even if a neighbor across the street has no service provider and is begging for broadband.

The Trump Administration has also hit the pause button on one initiative that was about to go into effect to provide broadband to lower income, underserved areas such as Indian reservations.

“We serve three tribes, how do we afford it?” said Johnson, of Paul Bunyan Communications. “It was a lifeline for broadband, we were about to hit go, now there’s a big pause button at the FCC.”

FCC reverse auction to “expand rural broadband access” includes parts of MN

The FCC  just released information on their upcoming reverse auction. The idea is that broadcasters will relinquish spectrum and mobile broadband providers will buy that spectrum. Both sides bid at the opportunity. The FCC will use those bids to determine prices, winners and losers. (Here’s a better, more detailed description.)

Parts of Minnesota (see map) are included in the reserve aucfcc-auction-eligibletion.

Here’s the FCC press releases on the opportunity…

 

WASHINGTON, February23, 2017–Continuing its push to expand access to broadband in rural America, the Federal Communications Commission today set key rules for a competitive “reverse auction” that will provide nearly $2 billion for rural deployment over the next decade.

In the upcoming Connect America Fund Phase II auction, providers will compete for support to expand broadband to unserved areas, along with voice service. The auction rules established today aim to maximize the value the American people will receive for the Connect America Fund dollars spent by balancing deployment of higher-quality services with cost efficiencies. Broadband access is essential in the 21st Century for jobs, education, information and economic development. Since 2011, the FCC has been working to expand access in rural areas where deployment costs are high by providing support from the Connect America Fund.

Today’s action focuses on census blocks unserved by broadband in 20 states where the nation’s largest carriers –known as “price cap” carriers –declined last year’s Connect America Fund offer of support. Also included in the auction are locations across the country with extremely high deployment costs.

The Order balances incentives for deployment of higher-quality services with cost efficiencies by establishing auction “weights” that credit bids by companies offering more robust service. Specifically, the Order:

 Establishes bidding weights to compare bids across performance tiers set last year (see 2016 press release at  https://apps.fcc.gov/edocs_public/attachmatch/DOC339550A1.docx)  These weights account for the value of higher speeds, higher usage allowances, and low latency  But the formula used to rank bidders balances these performance goals with the need to reach as many consumers as possible within the FCC’s budget for rural universal service support

The item builds on the substantial progress the FCC has made in recent years connecting rural America to broadband. In 2015, pricecap carriers accepted $9 billion over six years from Phase II

of the Connect America Fund to expand broadband in their rural service areas. And in March of 2016, the FCC reformed its broadband support for the nation’s smallest carriers, known as “rateof-return” carriers, providing $20 billion over the next decade.

Next steps for the Phase II auction include seeking comment on auction mechanics. After consideration of the record developed, the FCC will vote on finalauction details and set specific deadlines and dates.

Other resources: Preliminary map of areas eligible for the Phase II auction. https://www.fcc.gov/reports-research/maps/caf-2-auction-preliminary-areas/

Action by the Commission February 23, 2017 by Report and Order and Order on Reconsideration (FCC 17-12). Chairman Pai, Commissioner Clyburn approving. Commissioner O’Rielly approving in part and dissenting in part. Chairman Pai, Commissioners Clyburn and O’Rielly issuing separate statements.

FCC Chair’s Digital Empowerment Agenda – does it empower rural areas?

Yesterday I wrote about new FCC Chair Ajit Pai’s actions since taking the helm at the FCC. Generally I don’t go into detail about federal broadband policy because it’s all I can do to keep up with Minnesota policies and progress! But changes at the FCC will have an impact on rural broadband in Minnesota so I think it’s worth talking about it.

Before he became Chair, Pai published a Digital Empowerment Agenda, which outlines his recommendations for

  1. Gigabit Opportunity Zones (bringing broadband and digital opportunity to economically challenged areas)
  2. Mobile Broadband for Rural America
  3. Remove Regulatory Barriers to Broadband Deployment
  4. Promote Entrepreneurship and Innovation

There are a couple of themes in his plans – and to be fair this is an outline not a detail strategy but I think the themes are worth consideration.

Theme: Lessen Government Restrictions

Pai suggests that state and local lawmakers must adopt streamlined, broadband deployment-friendly policies, FCC should reform its pole attachment rules to reduce the costs of deployment, Congress should give the agency additional authority over poles owned by governments and railroads and  federal government should speed the deployment of broadband on federal lands and the FCC should use its existing authority to remove state and local barriers to deployment, such as unfair and unreasonable fees.

Theme: Tax cuts for Businesses

Pai recommends significant tax incentives to spur private-sector gigabit broadband deployment, tax credits to offsets the employer’s share of payroll taxes, a “rural dividend” to supplement existing funding sources and  promoting entrepreneurs’ access to capital. I’d like to see greater detail on these incentives. Pai led the FCC to vote to provide $170 million in CAF 2 funding to NY. I applaud the funding but CAF 2 only requires a provider to build to 10 Mbps down and 1 up. It’s like giving a 10 speed bike to a 16 year old who really wants and needs a car. The bike is better than nothing but it will limit what they can do – like where they can work or go to college.

Minnesota Border to Border grants require that projects are “scalable to 100 Mbps” so improvement builds to more improvement. CAF 2 doesn’t require scalable improvements. For these reasons, many people argue that CAF 2 isn’t a good use of taxpayer funds.

Theme: Wireless is Good Enough for Rural

All of Pai’s upgrades for rural areas are based on mobile technology. I have said before there will always be a place for wireless. But mobile broadband is not a good permanent solution for rural areas. There are d Distance limitations and data caps make mobile unaffordable to the end user. Some wireless providers are talking about 5G as a solution but 5G is still an undefined standard with greater distance restrictions than 4G and it requires greater infrastructure.

There are some providers who have figured out how to serve the current and future needs of rural area. (Hiawatha Broadband and Paul Bunyan to name just two.) And they aren’t focusing on mobile. We need to find a way to get the right incentives to the folks who are deploying long term broadband solutions to rural areas.

Absent Theme: Public-Private Partnership

Bucking every trend and recommendation I’ve seen related to rural broadband – public-private partnership is not mentioned once in his agenda. His solution is provider driven. It requires motivated providers.  For communities where the provider is not interested they need better tools to make it happen than tax incentives and broadband-friendly policies.

What’s going on at the FCC? Lots of changes – new decreases and stops on past actions

Late last month, I mention that the FCC had a new chair – Ajit Pai. One of the interesting things he did almost immediately was announce a Broadband Deployment Advisory Committee. (Applications to join the committee are due today.) Since those posts (and even before them) he’s been busy. Here’s a timeline of things that have happened.

Sep 13, 2016 – Pai creates a Digital Empowerment Agenda – there is a push to increase access to broadband by “incentivizing providers” and “remove state and local barriers to deployment.” The proposal leave heavily on the private sector expanding broadband deployment.

Dec 8 (2016) – Pai talks about cutting down net neutrality

Federal Communications Commission member Ajit Pai yesterday vowed to take a “weed whacker” to FCC regulations after President-elect Donald Trump takes office, with net neutrality rules being among the first to be cut down.

Jan 24 – Pai gives a speech expressing an interest in closing the digital divide or at least supporting the private sector as they build networks…

“I believe one of our core priorities going forward should be to close that divide—to do what’s necessary to help the private sector build networks, send signals, and distribute information to American consumers, regardless of race, gender, religion, sexual orientation, or anything else.  We must work to bring the benefits of the digital age to all Americans.”

Jan 26 – FCC votes to provide up to $170 million from the Connect America Fund to expand broadband deployment in unserved rural areas of New York State…

The $170 million in federal funding will be coupled with at least $200 million in state funding and private investment to jump-start broadband deployment and close the digital divide in these unserved areas more quickly. This partnership with the state program will also result in more efficient and effective use of both state and federal funding.

Jan 27 – Decreases transparency for broadband providers

When the FCC passed its net neutrality rules in 2015, they included transparency measures for internet service providers. Big providers were required to submit information to regulators and consumers on data caps, fees, and speeds, but the order also included a temporary waiver for providers with less than 100,000 subscribers. After a re-extension, the transparency requirements would have gone into effect this month. …

Pai, who was just appointed to the new job this week, introduced a proposal that would not only extend that waiver for a full five years, but expand it. If passed by the rest of the agency’s commissioners, any service provider with fewer than 250,000 subscribers will not be bound by the transparency requirements.

Jan 31 – removes from consideration the option to allow non-broadband providers to make and sell cable boxes. (Reminds me of Caterfone decision.)

The FCC has good news this morning for cable and satellite companies, but bad news for their subscribers who hate the set-top boxes they usually must lease in order to watch TV.

The agency’s new chairman, Ajit Pai, has removed from its agenda consideration of a proposal that would have made it possible for independent manufacturers to sell boxes that could replace the ones providers supply. The FCC says that 99% of subscribers pay an average of $231 a year to lease the boxes, even well after they’ve covered the cost of the devices.

Feb 2 – Increases transparency for the FCC

So, in a first-ever pilot project, the Federal Communications Commission has begun publishing the full text of proposals and regulations that the public would otherwise never see until after they have been finalized and approved.

Feb 3 – Removes 9 companies from the Lifeline program.

The Federal Communications Commission dealt a blow to a program intended to provide subsidized internet to the poor, announcing that nine companies would no longer be able to participate in the plan. …

“By eliminating the designations of nine entities to provide Lifeline broadband service, the Bureau has substantially undermined businesses who had begun relying on those designations,” Clyburn said. “These providers include a minority-owned business, a provider enabling students to complete their homework online, and others serving Tribal lands.”

Feb 3 – Closes investigations into zero-rating by T-Mobile, AT&T, Verizon, and Comcast. Zero-rating is a practice of allowing customers to stream *some* music and video without it counting toward a data plan limit…

“Today, the Wireless Telecommunications Bureau is closing its investigation into wireless carriers’ free-data offerings,” FCC Chairman Ajit Pai said in a statement. “These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace. Going forward, the Federal Communications Commission will not focus on denying Americans free data. Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings.”

It may be a popular choice but sounds a lot like what Net Neutrality marshaled against.

Feb 3 – the FCC retracts several reports released by the previous administration – released at the very end if their tenure and that is the reason Pai gave for revoking them. So what was revoked?

Spiking the investigation into zero-rating practices by telecoms is the most serious about-face, but it’s worth noting the other items going down the memory hole, unannounced, on a Friday afternoon. …

The Public Safety & Homeland Security Bureau issued a 56-page white paper entitled “Cybersecurity Risk Reduction” on January 18th that addressed issues from Internet of Things security to reporting outages in submarine cables. It now has “no legal or other effect or meaning.” …

A second paper filed on the 18th examines progress made in modernizing the E-rate program, which provides discounts to schools for internet connectivity, as a follow-up to orders filed by the FCC in 2014….

A third paper ordered removed is a report on security challenges that might be encountered during the rollout of 5G mobile networks and associated devices. …

A fourth, shorter report regarding methodology in improving broadband networks was ordered nullified. …

Last is the “reconsideration” of several companies that had petitioned to be part of the Lifeline low-income connectivity voucher program. Several companies granted permission to be providers in recent weeks had that permission snatched away.

Are you right for the FCC Broadband Deployment Advisory Committee? Deadline to apply is Feb 15.

According to an FCC press release

FCC Chairman Ajit Pai announced the formation of a new federal advisory committee to explore ways to accelerate deployment of high-speed Internet access (or “broadband”) nationwide and to close the digital divide.

Sounds like the work is already lining up…

The Committee will focus on developing specific recommendations on how the FCC can encourage broadband deployment across America. Issues the Committee will tackle include further reforms to the FCC’s pole attachment rules; identifying unreasonable regulatory barriers to broadband deployment; ways to encourage local governments to adopt deployment-friendly policies; and other reforms within the scope of the Commission’s authority.

In particular, one of the Committee’s first tasks will be drafting a model code covering local franchising, zoning, permitting, and rights-of-way regulations. Many localities may not currently have or be able to develop policies conducive to deployment. With a model code approved by the FCC, any city could build a better regulatory environment for deployment, and any provider would have a better case for installing infrastructure.

Now they just need a few good people…

Nominees for the newly formed Broadband Deployment Advisory Committee will be drawn from a diverse set of stakeholders to address specific regulatory barriers to broadband deployment in both urban and rural areas. Representatives of consumers and community groups, the communications industry, and federal, state, local, and Tribal officials are encouraged to apply.

Individuals or organizations interested in serving on the Committee should visit www.fcc.gov/broadband-deployment-advisory-committee for information on the nominating process. Please submit all nominations by e-mail to BDAC@fcc.gov. The FCC will accept nominations until February 15, 2017. The Commission expects to hold its first meeting of the new Committee during the spring of 2017.

It sure would be nice to have some Minnesota voices on the team!

New FCC Chair – Ajit Pai: opposed Net Neutrality, former counsel to Verizon

Here’s a brief description of the new FCC Chairman from Telecompetitor

Pai has opposed Open Internet, also known as Net Neutrality regulation, suggesting the future of that regulation could be in peril – as could the decision to classify broadband as a Title II telecommunications service, which was coupled with the commission’s most recent moves on Net Neutrality. Pai also has opposed regulating broadband business services – a move that the commission under Wheeler had been poised to make. He has opposed efforts by the FCC that would make it easier for municipalities to build their own broadband networks.  And he has opposed broadband privacy regulation.

Issues on which Pai has found consensus with Democratic colleagues include universal service reform, spectrum allocation and others

Apparently he has demonstrated an interest in rural broadband…

Pai grew up in Kansas and on various occasions has demonstrated an interest in and understanding of rural telecom issues, as well as fiscal conservatism.

Several months ago, for example, Pai advocated giving tax breaks to network operators to deploy gigabit service in certain rural areas and using 10% of the money raised from spectrum auctions for the deployment of mobile broadband in rural America.

Digging deeper into Pai’s previous recommendations, it looks like he’s a proponent of mobile solutions…

The Pai Gigabit Opportunity Zones proposal also calls for the creation of a Mobility Fund Phase II as part of Universal Service reforms. The program would cover some of the costs of deploying mobile broadband in high-cost rural areas and would be funded – at least in part – through spectrum auctions. Pai’s speech notes that the proposed program would have raised $700 million annually if it had been in place over the last 10 years

The idea of dedicating 10% of spectrum auction proceeds to mobile broadband deployment could be a compelling one at a time when some people have questioned whether the current Universal Service budget is sufficient to support the cost of nationwide wired and wireless broadband deployments. Currently the Universal Service program is funded through the telecom industry as a percentage of voice revenues. But proposals to expand the contribution base to include broadband services have met with strong resistance, even as the program has been expanded to fund broadband deployments.

Strategies and Recommendations for Promoting Digital Inclusion

The FCC recently released their Strategies and Recommendations for Promoting Digital Inclusion. The report paints a picture of what the digital divide looks like today –

  • Americans with the lowest incomes are most likely to go without broadband at home.
  • Americans who are more likely to have low socioeconomic statuses due to historical and systemic barriers to education, opportunity, and adequate housing are least likely to have home broadband connectivity
  • African-Americans and 50 percent of Hispanics subscribe to a home broadband service, compared with 72 percent of White Americans
  • A rural-urban divide persists as well
  • People with disabilities and older adults are also more likely to go without a home broadband subscription
  • Perhaps one of the starkest divides in broadband access and adoption exists in Indian Country, where broadband is often unavailable

They also talk about national and local efforts to close the divide. It was nice to see the Blandin Foundation mentioned…

Example: The Blandin Foundation serves rural Minnesota by strategically allocating grants to organizations that support broadband access, adoption and digital literacy through its Community Broadband Resources Program. The foundation supports a number of community projects throughout the state. For instance, in Nobles County, grantees are working to establish Wi-Fi hotspots to provide access to unserved residents. In Chisago County, where broadband is expensive, slow, or unavailable, Blandin undertook a community survey to paint a picture of the divide that exists for lawmakers and providers. As a result, providers have expanded service and rolled out significant service improvements. In Stevens County, the foundation supported a consortium of school districts that developed a broadband-based system for providing specialized distance learning for students with disabilities. And in the Central Woodlands area of the state, a Blandin-funded pilot project assisted local businesses with adopting e-commerce and as a result, the program has expanded to help businesses in surrounding areas. All of these institutions, and the others that Blandin supports, have targeted-mission specific needs that are unique to their rural geography. As a community foundation, Blandin is uniquely situated to appreciate and assess those needs and support groups accordingly.

And they made recommendations. I’m going to try to shorthand them below (they are detailed in the report)..

Outreach & Education

  • Consider the creation of an online hub that catalogues digital inclusion resources by state
  • Consider convening a series of in-person and online National Digital Inclusion Summits across the country
  • Consider hosting a separate meeting to bring together representatives of Tribal libraries with representatives of non-tribal libraries and researchers
  • Consider increasing outreach to people with disabilities and their representatives

Partnerships

  • Commission, along with partners at the Department of Education and other interested federal agency stakeholders, may wish to explore ways to facilitate relationships in states between workforce development programs and community colleges
  • Bureau’s Office of Intergovernmental Affairs(IGA)may consider engaging and working with the National Association of Regulatory Utility Commissioners, the National Association of Utility Consumer Advocates, and local government representatives including the National Association of Counties and the U.S. Conference of Mayors to identify and connect community anchor institutions and grassroots organizations
  • IGA and the Office of Native Affairs and Policy could also liaise with state and local governments to explore partnerships between cities and/or states and nearby Tribal governments and Tribal libraries

Policy

  • Support Lifeline Aggregation Projects
  • Make Purchasing ISP Services Simpler and More Transparent
  • Support Using the Educational Broadband Service to Provide Service to Underserved Areas
  • Support Using Existing Federal Legislation to Promote Digital Inclusion.