Reforming Federal and State Universal Service Mechanisms to Deliver - - PowerPoint PPT Presentation

8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-8666

Reforming Federal and State Universal Service Mechanisms to Deliver Broadband to Rural Areas

United States Cellular Corporation NARUC Summer Meeting

Nashville, TN

July 24, 2016

8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-8666

Purpose of FCC Presentation

• To provide credible data demonstrating that mobile wireless

coverage in rural areas is not nearly as comprehensive as government sources indicate.

• To advocate for federal universal service support mechanisms

that fulfill the Congressional directive to deliver to rural Americans access to advanced services that are reasonably comparable services to those available in urban areas.

• To suggest an alternative for Mobility Fund Phase II, to replace

a Phase I mechanism that largely failed.

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8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-8666

CQA Paper – Mobile Voice and Broadband Coverage

• Suggests ways to measure coverage, service availability,

network quality, and subscriber experience.

• For broadband, most mapping sources used by the FCC use

advertised speeds, or contain no speed data.

• CQA’s analysis highlights stark differences in coverage,

depending upon the mapping source.

• 2016 Broadband Progress Report states that 87% of rural

Americans lack access to 10/1 mobile broadband service.

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8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-8666

These Findings Should Give the Commission Pause – Using Some

• f the Drive Test Resources Deployed for Auction 901 Verification

to Audit the NBM Would Be a Useful Exercise.

Source: 2014 CostQuest Analysis of National Broadband Map and Mobile Pulse Data

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8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-8666

Percentage Of Field Tests Meeting Advertised 10/1 Throughput Speed:

Sources: 2014 Mobile Pulse & CostQuest Associates Analysis

State Measurement Unit Carrier X Mobile Pulse Carrier Z Mobile Pulse SD Roads 23.2% 57.1% SD Population 31.5% 58.9% SD Business Firms 28.8% 63.0% CO Roads 6.8% 18.1% CO Population 4.9% 18.6% CO Business Firms 5.8% 17.5% ID Roads 27.6% 31.7% ID Population 27.7% 24.5% ID Business Firms 24.6% 25.4% WI Roads 55.3% 60.6% WI Population 59.1% 55.4% WI Business Firms 62.5% 56.1% WY Roads 11.6% 35.4% WY Population 10.1% 25.6% WY Business Firms 8.9% 23.7% TOTAL Roads 33.0% 44.5% TOTAL Population 34.3% 32.3% TOTAL Business Firms 31.9% 32.3%

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8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-8666

CQA Paper – Ongoing Support for Operations and Maintenance of Rural Mobile Networks

• A tower requires 900 active subscribers at an ARPU of

$56.21, for five years, to achieve positive cash flow.

• Just a 6.5% ARPU reduction (<$4.00) requires 300 more

subscribers to break even by year five.

• Without approximately 900 active subs, support for

maintenance capex and opex can be critical to keeping a cell site on-air.

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8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-8666

Proposal for a State Broadband Grant Fund

• Proposal would deliver grants and matching funds to participating states.
• Simple rule template for technology neutral awards, empowering states to

direct funds to areas identified as unserved or underserved.

• Simple scoring system and verifiable commitments required of carriers.
• If FCC does not act, then a state having statutory authority could and

should adopt a BB fund within its state USF mechanism. NE, CO, NM, CA, VT, WV, ME, DE have BB fund mechanisms.

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8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-8666

Improving Mobile Broadband in Rural Areas is a Critical National Priority

• Public safety – the rise of location-based services, text and

video 911, and FirstNet.

• Health care – monitoring devices, video conferencing for

first responders.

• Internet of Things – 21 billion devices by 2020 and $15

Trillion of GDP by 2030.

• Agriculture – connected machinery, livestock management,

irrigation, commodity tracking.

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8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-8666

Improving Mobile Broadband in Rural Areas is a Critical National Priority (cont’d)

• Education – students increasingly using mobile to

access learning materials.

• Low-income households - over half use a mobile device

for all communications and Internet needs.

• None of these benefits will come to rural Americans

unless high-quality mobile broadband is available everywhere they live, work and travel.

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