Jeff Mitchell Lukas LaFuria Gutierrez & Sachs, LLP Tysons,Virginia Hometown: A2, Michigan • B.A., University of Washington 1993 • J.D. Georgetown 1997 • Telecommunications attorney since • 1999 Former USAC Associate General • Counsel and Director of Outsourced Audits Practice focus on rural broadband • and universal service 1 (images courtesy shorpy.com)
Infrastructure legislation (BTOP-2?) Federal universal service programs (E-rate, RHC) FCC highlights Net neutrality update 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX 2
Trump Infrastructure Plan • Reports: coming Monday • Goal: generate $1.5 trillion in investment over a ten year period • Will provide match funding for state/local/private investment $750 billion(?) over ten years 25% dedicated to rural? • Roads, bridges, etc. including “expanding broadband access” Actual projects to be chosen by states/localities 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX
Broadband bills pending in the House include: “MAPPING NOW” Act (Johnson -OH) would resume and improve NTIA broadband mapping efforts. “WIFI Study” Act (Costello -PA): would study using unlicensed spectrum to help support internet traffic management and the potential for gigabit WiFi “PEERING” Act (Long -PA): match funding through NTIA for building/expanding Internet peering locations in underserved areas; make RHC and E-rate available to connect/maintain. “Broadband Infrastructure Finance and Innovation Act (BIFIA)” (Lujan -NM): NTIA- administered $5 billion broadband infrastructure bank (loans only). 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX
“Closing the Digital Divide: Broadband Infrastructure Solutions” (House Hearing, Jan 2018): Witness testimony from Joanne • Hovis (CTC Technology and Energy): Reducing barriers to private investment only goes so far; Certain areas, both rural and urban lack sufficient ROI; government can improve private ROI with public funding; Leverage, don’t preempt, local partners . 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX 5
“Universal service” is a principle that has been recognized for over 100 years: all Americans should have access to communications services. Congress in 1996 extended beyond basic telecommunications. Authorized the FCC to establish four programs: High Cost (aka Connect America) – • ensures telephone companies serving rural areas provide affordable services Lifeline – ensures eligible low income • Americans have access to telecommunications Schools & Libraries (E-rate) – ensures • schools and libraries have access to broadband Rural Health Care – ensures rural health • care providers have access to broadband 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX
Assessable Revenues vs. Non-Telecommunications Revenues (2004-2014) 300 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Assessable Revenues Non-Telecom Revenues • High Cost (Connect America) = $4.56 billion • Low Income = $1.51 billion • Schools & Libraries (E-rate) = $2.39 billion • Rural Health Care = $0.30 billion • TOTAL = $8.75 billion
Graphic courtesy Funds For Learning, 2017 E-rate Trends Report https://ecfsapi.fcc.gov/file/101270038100588/ExParte2017E-rateTrendsReport_2018-01-17.pdf 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX
Scathing Apr 2017 letter to USAC CEO from Chairman Pai re: EPC problems, lack of transparency USAC leadership and management • changes: New CEO; new E-rate VP Fiber special construction challenges Heightened scrutiny • Unclear/undisclosed review criteria • Unacknowledged policy changes • Responses: SHLB FCC letters (Apr 2017/Jan • 2018) Education Superhighway: • delaysanddenials.org 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX
Graphic courtesy Funds For Learning, 2017 E-rate Trends Report https://ecfsapi.fcc.gov/file/101270038100588/ExParte2017E-rateTrendsReport_2018-01-17.pdf 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX
Sufficiency of Cat 2 Wi-Fi budgets: FCC request for comment Five-year school budgets = • $153.47 per student (pre-discount); libraries based on square footage Bureau report due before FY 2019 • Why are Cat 2 budgets declining? Impact of voice phase down? • Problems using EPC? • Size and implementation of budget • caps? 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX
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 Eligible rural health care providers Eligible rural health care providers and consortia Non-rural if part of a majority-rural consortium Eligible services Telecommunication Broadband services and equipment Customary installation charges Customary installation charges ($5K) Additional options for consortia Multi-year funding commitments Network services & equipment (NOCs) Upfront costs: IRUs, Long Term Leases, Network construction (in some situations) Telecommunications providers only Vender Eligibility Any vendor that provides eligible services 2016 Spend $209 million $160 million Funding availability: $400 million annually (of which $150 million max available for HCF long-term support) 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-86XX
$400 million cap hit in FY 2016 2016 pro rata reductions 7.5% • Cap hit again in FY 2017 • 2017 funding decisions still pending • Notice of Proposed Rulemaking (NPRM) and Order (Dec 2017) Order: rollover funding for 2017 • NPRM: initial comments Feb 2; replies Mar 5 • Increased Enforcement Activity DataConnex NAL (Jan 2018) • Connect2Health Task Force Request for comments on broadband- • enabled health care. Joint project with the National Cancer Institute • (NCI) to study how increasing broadband access and adoption in rural areas (Appalachia) “can help address the burden of sympto m management for cancer patients.” 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX
8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-86XX
8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-86XX
NPRM: Mostly focused on Telecom Program • reforms Implementing a priority system • could severely impact HCF consortia SHLB health group: Double size or take Telecom • Program out of cap; index Limit max pro rata reduction for most • rural Implement differential discounts in • HCF Don’t create “priority 2” • AT&T and US Telecom: Reform program before increasing • cap 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX 16
8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX
Business Data Services Order (BDS) Acknowledged FCC’s historic recognition of R&E • networks as providers of private not common carriage Broadband Development Advisory Committee and proceedings to streamline deployment of 5G and fixed broadband Section 706 report issued (Jan 2018) Requires FCC to “encourag e the deployment on a • reasonable and timely basis of advanced telecommunications capability to all Americans” – currently defined as fixed broadband of 25/3 Concluded FCC is now doing that – citing the many • deregulatory actions taken, including net neutrality reversal – but asserts conclusion will not slow efforts to bridge digital divide. • Slammed by minority for shifting from whether rate of broadband deployment is acceptable vs. whether FCC is taking sufficient actions: 19 million Americans in rural areas lack 25/3 12 million school-aged children affected by Homework Gap 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX
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