Br Broa oadband Pol olicy Update The The Quilt Quilt Je Jeff - - PowerPoint PPT Presentation

Br Broa

• adband Pol
• licy Update

The The Quilt Quilt

Je Jeff Mitch chell Fl Fletcher, Heald & & Hildreth, PLC mi mitch chell@fhhlaw.com (7 (703) ) 812-0450 0450

Fe February 6, 2019

Ag Agenda

• 2018 Activities
• Prospects for infrastructure legislation
• Federal universal service programs (E-rate, RHC)
• FCC highlights
• Net neutrality update

2018 2018 Act ctivity Highlights

Ø(March 2018) Omnibus Budget Act: $600 million for rural broadband through USDA Rural Utilities Service (RUS)

Ø For RUS Distance Learning, Telemedicine, and Broadband Program Ø USDA authority to design program Ø Legislative language suggested focus on 10/1 to the last mile.

ØThe Quilt goes to Washington

Ø(April 2018) Met with RUS, House & Senate Committee Staff and FCC

Ø Educated about R&E role; positioned as potential resource Ø Asked that funding be available on a competitive basis to non-commercial providers Ø Addressed “overbuilding” concerns (importance of route diversity)

Ø(September 2018) Filed public comments in response to USDA request – urged grants, anchors, tribal, regional approach (middle mile).

US USDA ReConnect ct Pr Program

Ø $200 million grants; $200 million loans; $200 million 50/50 combination:

Ø Funding available to non-profit entities and state agencies, subdivisions or instrumentalities. Ø Pure grants available in areas where 100% of households unserved by 10/1 broadband.

Ø Two-step eligible area determination process:

Ø First, USDA has identified ineligible areas https://reconnect.usda.gov/s/article/Mapping-Tool. Ø After application filed, USDA will map and post on the USDA website. Service providers have 30 calendar days to file maps showing where they are already serving specific locations.

Ø Application points:

Ø Awarded for serving anchor institutions, specifically including farms, businesses, “educational facilities,” “healthcare centers,” and “critical community centers”. Ø Points available based on how rural, speed/quality of the service, serving tribal lands, and whether the state has a broadband plan, allows utilities to provide broadband, and has committed to expedite rights-of-way and permitting. Ø Points available for projects that commit to build a network supporting 100 Mbps symmetrical.

Ø Deadlines: Grant applications due April 29; loan/grant applications due May 29

Source: https://news.microsoft.com/rural-broadband/#broadband-availability

In Infr fras astructure e Legi gisl slation

ØPotential area of agreement between Democratic House and President Trump

Ø No sooner than May 2019 Ø Much uncertainty: More shutdowns? Other distractions?

ØRecently introduced bills

Ø Rebuild America’s Schools Act – (Scott D-VA, Norcross D-NJ, and 152 co-sponsors) would appropriate $100 billion for school infrastructure to include funding for broadband Ø Connect American Fund Accountability Act – (Collins R-GA) requires CAF recipients to report how they test their services and choose a sample that is representative of their consumers.

ØSHLB infrastructure bill

Ø Broadband for Anchor Institutions Legislative Working Group (BAILWG) drafting legislative language to support Gigabit broadband to (and through) anchor institutions by 2024. Ø Chip Byers tapped to co-chair the group. Ø DRAFT1 just released

SH SHLB Draft Infrastruct cture Bill

Ø Broadband Network Grant Program

Ø $3 billion/year for five years Ø Rewards states that provide 1/3 match Ø Open access/must serve anchors

Ø Broadband Adoption Grants

Ø $500 million/year for five years

Ø Universal Service Reforms

Ø Breakdown silos Ø Codify Lifeline Ø $1 billion cap for RHC funding Ø Broaden contribution base

Ø Broadband mapping

Ø $50 million/year for five years Ø Map anchors; verification of industry data; crowd sourcing

Ø Research into benefits of broadband

Ø $100,000/year for five years

Un Univ iver ersal al Ser ervic vice

Ø “Universal service” is a principle that has been recognized for over 100 years: all Americans should have access to communications services. Ø Congress in 1996 codified and extended beyond basic telecommunications:

Ø High Cost (aka Connect America) – ensures companies serving rural areas provide affordable services Ø Schools & Libraries (E-rate) – ensures schools and libraries have access to broadband Ø Rural Health Care – ensures rural health care providers have access to broadband Ø Lifeline* – ensures eligible low income Americans have access to telecommunications (*pre-dated 1996 Act)

• High Cost (Connect America) = $4.67 billion
• Low Income = $1.26 billion
• Schools & Libraries (E-rate) = $2.65 billion
• Rural Health Care = $0.26 billion
• TOTAL = $8.85 billion

$0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Intrastate, Assessable (Interstate + Int’l) and Non- Telecommunications Revenues

2004-2016 (in billions)

Intrastate Revenues Interstate + Internat'l Revenues Non-Telecom Revenues

2017 Authorized Support

Graphic courtesy Funds For Learning, 2018 E-rate Trends Report https://ecfsapi.fcc.gov/file/10713255555242/2018_E-rate_Trends_ReportSml.pdf

E-rate Update

Graphic courtesy Funds For Learning, 2018 E-rate Trends Report https://ecfsapi.fcc.gov/file/10713255555242/2018_E-rate_Trends_ReportSml.pdf

E-rate Update

E-rate Update

Ø Amortization of Non-Recurring Charges

Ø Since 2000, upfront, non-recurring charges of $500,000 or more must be amortized over a 3-year period Ø 2014 Modernization Order suspended requirement until 2018 Ø In January the FCC suspended requirement for one more year and proposed permanently eliminating

• requirement. FCC tentatively concluded that elimination:

1. decreased administrative burdens; 2. allowed faster disbursements for the full E-Rate supported portion of projects; 3. reduced uncertainty regarding the availability of funding.

Ø Category 2 Spending

Ø Five-year trial period for school budgets = $153.47 per student (pre-discount); libraries based on square footage Ø Bureau report due before FY 2019 – Non-public? SHLB letter in the works

Ø Gift Rule confusion around product demonstrations Ø Solix => MAXIMUS transition; USAC issues generally

RHC Update

Program Telecommunications Program Healthcare Connect Fund

Authority 47 U.S.C. section 254(h)(1)(A) 47 U.S.C. section 254(h)(2)(A) Discount Urban-rural differential (cost parity) 65% flat rate subsidy Eligibility ž Eligible rural health care providers ž Eligible rural health care providers and consortia ž Non-rural if part of a majority-rural consortium Eligible services ž Telecommunication ž Customary installation charges ž Broadband services and equipment ž Customary installation charges ($5K) ž Additional options for consortia ž Multi-year funding commitments ž Network services & equipment (NOCs) ž Upfront costs: IRUs, Long Term Leases, Network construction (in some situations) Vender Eligibility ž Telecommunications providers only ž Any vendor that provides eligible services 2016 Spend $209 million $160 million

Funding Cap: $582 million for FY 2018; $150 million sub-cap for HCF upfront and long-term support

RHC Update

RHC Update

ØCap Headaches

Ø FY 2016: delays and funding “haircuts”; Notice of Proposed Rulemaking (Dec 2017) Ø FY 2017: delays and worse haircuts; consortium cuts of 25%!

Ø SHLB Emergency Petition (April 2018); bi-partisan Senate Letter Ø FCC Increased and indexed cap (June 2018); retroactive

Ø FY 2018 $150 million sub-cap hit; delays; cuts?

ØIntense FCC/USAC scrutiny of Telecom Program

Ø Unilateral rate reductions in Alaska in FY 2017 Ø Additional comments sought on Telecom Program rural and urban rates (Dec 2018) Ø Should Telecom Program be scrapped outside of Alaska?

ØProposed $100 million “Connected Care” Pilot Program

Ø “Notice of Inquiry” completed Ø Notice of Proposed Rulemaking next up

FCC Highlights

ØEducational Broadband Service (EBS)

Ø SHLB opposing auctions; supporting educational providers’ priority Ø Highlighting successful deployment in Michigan and interest in similar projects from Nebraska and Virginia.

ØBroadband Development Advisory Committee (BDAC)

Ø Proposed 2-year reauthorization Ø To focus on: Disaster recovery; high-speed broadband infrastructure and services for low-income communities; other ways to accelerate deployment of broadband infrastructure to all Americans.

ØTV White Spaces aka Microsoft Airband Initiative

Ø $10 billion to serve 20 million residents in 17 states. Ø Microsoft projects underway in Ohio, New York, Maine, Virginia, Maryland, Michigan and Wisconsin. Ø Microsoft White Paper

Net Neutrality

ØCongress

Ø Democratic House likely to pass net neutrality legislation. Ø See Rep. Khanna’s (D-CA) 10 principles for an “Internet Bill of Rights” (Congressional district covers Silicon Valley.)

ØCourts

Ø Mozilla Corporation, et al. v. FCC – Challenge to the 2017 Restoring Internet Freedom Order DC Circuit Court of Appeals. Oral arguments were Feb. 1. Higher ed. Amicus Brief. Ø Eastern District of California – Challenge to SB 822, the California Internet Consumer Protection and Net Neutrality Act of 2018 by the Department of Justice (DOJ) and several industry groups (in a separate suit). On October 26 the court agreed to a request by all parties to stay the case after California agreed not to enforce the law pending outcome at the DC Circuit decision on the FCC’s Restoring Internet Freedom order. Ø Vermont District Court – Challenge to Vermont’s net neutrality law and executive order by industry associations; motion for summary dismissal under consideration.

ØStates

Ø National Conference of State Legislators (NCSL) features an up-to-date summary of state net neutrality actions here.

Je Jeff Mitch chell (7 (703) ) 812 812-0450 0450 mi mitch chell@fh fhhlaw.c .com

Que Questions ns?

www www.fhhlaw.com www www.commlawb wblog.com @C @CommLawblog