Federal Communications Commission

I want to discuss efforts at the Federal Communications Commission that involve libraries. Specifically, I want to talk about our efforts to reboot, reinvigorate, and recharge E-Rate -- or what I like to call E-Rate 2.0. And before I finish, I want to talk about another hot topic before the FCC -- our efforts on network neutrality.

The E-Rate program, as some of you may know, is the nation’s largest educational technology program -- and it’s run by the FCC. E-Rate helps connect all of our schools and libraries to modern communications and the Internet. Our records suggest that 80 percent of schools and libraries believe their broadband connections do not meet their current needs. Eighty percent! So let’s be honest. Those needs are only going to grow.

Nationwide, in nearly two-thirds of communities, libraries are the only place people can access the Internet for free. Libraries have reported to the FCC that every year they see more and more requests to use public access computers and get online. Moreover, more and more information resources are headed to libraries in digital format, putting more pressure than ever before on bandwidth. Plus, for those who lack access to broadband at home, libraries are a lifeline. Because access to broadband is access to opportunity.

Access to broadband in libraries means access to jobs. Consider this -- 80 percent of Fortune 500 companies now require those seeking jobs to apply online. Access to broadband in libraries means access to education. Access to broadband in libraries also means access to information -- for all.

But if we want to keep up and make sure our libraries have the bandwidth necessary to support this opportunity, we need a revitalized E-Rate. We need E-Rate 2.0. There are three essential elements of E-Rate reform: Speed, Simplify, and Spending Smart.

Now I want to end by briefly talking about something else that is before the FCC -- network neutrality. I have real concerns about FCC Chairman Wheeler’s proposal on network neutrality -- which is before the agency right now. His proposal has unleashed a torrent of public response.

Tens of thousands of e-mails, hundreds of calls, commentary all across the Internet. We need to respect that input and we need time for that input. So while I recognize the urgency to move ahead and develop rules with dispatch, I think the greater urgency comes in giving the American public opportunity to speak right now, before we head down this road.

For this reason, I think we should delay our consideration of his rules by a least a month. I believe that rushing headlong into a rulemaking fails to respect the public response to his proposal.

We had an “all-hands” meeting of Federal Communications Commission staff to talk about the agency’s priorities and to provide an update on the Commission’s recent activities.

But the most important message I wanted to convey to FCC staff at this meeting was “thank you.” The public servants of the FCC -- and across government at all levels -- work every day on behalf of the American people with little or no fanfare.

The week is dedicated to making sure public servants across the country get the recognition they deserve. That’s because this is Public Service Recognition Week -- an annual celebration of the men and women who serve the United States as federal, state, county and local government employees.

The E-Rate program, and our work to reform and modernize it, is important.

Until 2019, the E-Rate program will collect and distribute over $12 billion to fund information technology in our nation’s schools and libraries. That’s real money -- $3 billion more than we committed to the Connect America Fund -- and it’s a real chance for us to make a difference.

The Federal Communications Commission needs to seize this opportunity for the kids of the 21st century. We should not settle for the existing system and just tinker around the edges -- we need real reform.

We need a student-centered E-Rate program that focuses on the needs of children. We need a program that replaces today’s complexity with simplicity, one that cuts red tape and makes it easier for schools and libraries to apply. We need a program that more fairly distributes E-Rate funds and puts small, rural schools and libraries on equal footing with their larger, more urban brethren. We need a program that promotes more careful spending, with additional transparency so that parents, educators, and the FCC can see how E-Rate funding is being spent.

Whether you call these reforms a student-centered E-Rate program, the ConnectED Initiative, E- Rate modernization, or E-Rate 2.0, the goal of meaningful change is shared by all schools and libraries, by service providers and equipment vendors, by Democrats and Republicans, by Commissioners and staff. The primary question at this point is how to achieve that goal. And that’s where you come in.

It is high time we give unlicensed spectrum -- airwaves open to all under technical rules -- its due.

Because it is an essential part of the wireless ecosystem, a critical part of wireless service, and an important input into the modern economy. In fact, the economic impact of unlicensed spectrum has been estimated at $140 billion annually. By any measure that is a lot.

So I think it is time for an unlicensed spectrum game plan. It should no longer be an afterthought in our spectrum policy. It deserves attention upfront, in policy prime time.

An unlicensed game plan takes high-band, mid-band, and low-band spectrum. High-band spectrum provides the large channels necessary for high-definition video at short distances—think streaming video from your laptop to your television. Mid-band spectrum sacrifices some of that throughput, but gives you further reach. Low-band spectrum can go far and wide, and as a result is ideal for larger-scale Wi-Fi deployments and machine-to-machine communications.

To build powerful wireless communications systems, you need a playbook that includes all three.

The Federal Communications Commission announces that it plans to fine Central Telecom Long Distance $3.9 million for allegedly deceiving consumers to switch their long distance service, billing customers for unauthorized charges, and failing to clearly and plainly describe charges on customers’ bills.

Many of these actions victimized elderly and disabled consumers.

The FCC found that telemarketers for Central Telecom, a Colorado Springs (CO) company, allegedly tricked consumers into believing that the telemarketers were calling on behalf of the consumers’ existing telephone companies, then changed the consumers’ preferred carriers without their authorization.

Many consumers stated in their complaints that they had never heard of Central or did not intend to sign up for its services. In many instances, Central and its representatives appear to have exploited elderly or disabled consumers’ obvious confusion and inability to understand the sales pitch they heard and the questions they were asked.

The FCC emphasized that this conduct was “particularly egregious,” and it noted that a sizable fine was warranted in part because of the “substantial harm” that Central caused to the public. One particular complaint was filed on behalf of a deceased elderly grandmother whom Central continued to bill for months after she died and even after her telephone was disconnected.

Broadcasters and the Federal Communications Commission should have a good relationship.

Unfortunately, the relationship between broadcasters and the FCC has become strained of late.

I wanted to discuss with you four areas where I think we can make things better: recognizing broadcasting’s value, treating broadcasters fairly in the upcoming incentive auction, revitalizing AM radio, and beginning to reform our media ownership rules.

The Universal Service Administrative Company (USAC) submitted projections of demand and administrative expenses for the federal universal service fund for the second quarter of 2014.

According to USAC’s projections, $600 million in unused funds from previous funding years is available to carry forward to increase disbursements to schools and libraries via the E-rate program, more formally known as the schools and libraries universal service program.

On April 17, 2014, USAC submitted an estimate of demand for the E-rate program for Funding Year 2014 (July 1, 2014 to June 30, 2015) of $4.825 billion, which includes estimated demand for priority one services (telecommunications, telecommunications services and Internet access) of $2.630 billion.

The Wireline Competition Bureau announces that $200 million in unused funds will be carried forward to ensure funding is available for all eligible priority one funding requests received from schools and libraries in Funding Year 2014 in excess of the annual cap.

We have circulated a Notice of Proposed Rulemaking to my fellow commissioners on the topic of the Open Internet.

There are two things that are important to understand. First, this is a Notice, which asks a number of questions and seeks input on the best way to protect and promote the Open Internet. Second, all options are on the table. Our goal is to put into place real protections for consumers, innovators and entrepreneurs that until now have been only a matter of debate and litigation.

I believe this process will put us on track to quickly get to legally enforceable Open Internet rules. There has been a great deal of talk about how our following the court’s instruction to use a “commercially reasonable” test could result in a so-called “fast lane” and Internet “haves” and “have nots.” This misses the point that any new rule will assure an open pathway that is sufficiently robust to enable consumers to access the content, services and applications they demand and innovators and edge providers the ability to offer new products and services.

The focus of this proposal -- on which we are seeking comment -- is on maintaining a broadly available, fast and robust Internet as a platform for economic growth, innovation, competition, free expression, and broadband investment and deployment. We will follow the court’s blueprint for achieving this, and, I must warn you, will look skeptically on special exceptions.

If someone acts to divide the Internet between “haves” and “have-nots,” we will use every power at our disposal to stop it. I consider that to include Title II. Just because it is my strong belief that following the court’s roadmap will produce similar protections more quickly, does not mean I will hesitate to use Title II if warranted. And, in our Notice, we are asking for input as to whether this approach should be used.

Some recent commentary has had a misinformed interpretation of the Open Internet Notice of Proposed Rulemaking (NPRM) currently before the Commission.

There are two things that are important to understand. First, this is not a final decision by the Commission but rather a formal request for input on a proposal as well as a set of related questions. Second, as the Notice makes clear, all options for protecting and promoting an Open Internet are on the table.

I believe this process will put us on track to have tough, enforceable Open Internet rules on the books in an expeditious manner, ending a decade of uncertainty and litigation. I do not believe we should leave the market unprotected for multiple more years while lawyers for the biggest corporate players tie the FCC’s protections up in court.

Notwithstanding this, all regulatory options remain on the table. If the proposal before us now turns out to be insufficient or if we observe anyone taking advantage of the rule, I won’t hesitate to use Title II. However, unlike with Title II, we can use the court’s roadmap to implement Open Internet regulation now rather than endure additional years of litigation and delay.

Let me be clear, however, as to what I believe is not “commercially reasonable” on the Internet:

• Something that harms consumers is not commercially reasonable. For instance, degrading service in order to create a new “fast lane” would be shut down.
• Something that harms competition is not commercially reasonable. For instance, degrading overall service so as to force consumers and content companies to a higher priced tier would be shut down.
• Providing exclusive, prioritized service to an affiliate is not commercially reasonable. For instance, a broadband provider that also owns a sports network should not be able to give a commercial advantage to that network over another competitive sports network wishing to reach viewers over the Internet.
• Something that curbs the free exercise of speech and civic engagement is not commercially reasonable. For instance, if the creators of new Internet content or services had to seek permission from ISPs or pay special fees to be seen online such action should be shut down.

According to the Government Accountability Office, Federal agencies are currently spending over 70% of their Information Technology budgets on maintaining legacy systems.

Government-wide, these maintenance costs amount to over $54 billion a year spent on existing legacy systems, and delays needed transitions to newer technologies. Moreover, this cost only captures those legacy processes automated by IT; several paper-based, manual processes exist and result in additional hidden, human-intensive costs that could benefit from modern IT automation.

In the spirit of openness, I’d like to share our seven tracks as we embark on our journey to modernize the FCC enterprise. These tracks and supporting goals represent our focused efforts to bring the FCC into the 21st century and ensure the Commission has some of best IT in government supporting its mission.

Like an iceberg where a majority of the ice is hidden underwater, modernizing manual, human-intensive processes at the FCC will reduce legacy “sunk costs” at the Commission. The result will be a more agile, responsive, IT-enabled FCC enterprise able to work faster and float “above water”. Our workforce will be more effective, efficient in their time and energy, and better able to deliver the highest quality public service to the US public and FCC partners.

• Improve Secure Employee Telework & Mobility
• Secure Internal & External Collaborations
• Strengthen FCC’s IT Security Posture
• Transform Access to FCC Enterprise Data
• Modernize Legacy Systems & Tracking
• Improve FCC.gov & Complaint Reform
• Increase Transparency & System Usability

[Bray is the FCC’s Chief Information Officer]