Universal Broadband

On June 16, 2017, Federal Communications Commission Chairman Ajit Pai responded to various members of Congress responding to questions surrounding affordable broadband in high-cost rural areas.

Chairman Pai wrote, "Despite the Commission's efforts in the 2016 Rate-of-Return Reform Order, I still hear from small carriers that offering stand-alone broadband would put them underwater-that the rates they have to charge exceed the rates for bundled services because of the different regulatory treatment. To provide some relief, my colleagues in recent months have urged me to work through a punch list of lingering issues from the Order. I have accordingly directed staff to work through that list. In April, the Commission amended a rule that would have disallowed capital expenses to any project exceeding a Commission-set threshold by even a dollar; now providers can complete efficient projects so long as they are willing to absorb any costs above the threshold. That month staff also resolved concerns raised by rural carriers about the "parent-trap" rule. In May, I circulated an order to address problems with two calculations made in the Order-one involving a "surrogate method" to avoid duplicative cost-recovery and another involving charges imposed on stand-alone broadband lines. Also in May, I circulated an order to address certain duplicative reporting requirements imposed on rural providers. I look forward to continue working with my colleagues on these issues."

A $130 billion to $150 billion fiber infrastructure investment is required in the US to unleash innovation, close the digital divide, and fully prepare the country for 5G, according to a report from management consulting firm Deloitte. The report says the investment is needed over the next five to seven years to enable ‘deep fiber,’ or fiber infrastructure closer to the end user.

Much of the premise behind the report focuses on 5G, which requires a dense fiber network for backhaul and fronthaul. But it also stresses the discrepancy between rural and urban broadband options. Deloitte is calling on regulators and the broadband carrier community to address this issue, or risk losing leadership for the global digital economy opportunity. The report says the US currently lacks the fiber infrastructure necessary to take advantage of 5G. Many tier one carriers, including Verizon, have expressed their plans to ramp up fiber investments. Deloitte seems to suggest it’s not enough.

California faces a growing class of “under-connected” households that rely only on smartphones for online access, a trend that may worsen the state’s economic inequality, according to a report released by UC Berkeley Institute of Governmental Studies. In 2017, more Californians — 87 percent of the state’s households — had broadband Internet connectivity at home. But of those, 18 percent had smartphones as their only computing devices, more than double the 8 percent just two years earlier.

While smartphones provide a cheaper, more portable way to get online, their limited computing power hinders the development of basic computing skills, leaving smartphone-only households much less likely to be integrated into California’s booming tech economy, experts said. Thirty-four percent of those without broadband at home cited the expense. They also acknowledged they felt disadvantaged in developing new career skills or taking classes, according to the poll, which surveyed more than 1,600 adults in six different languages.

The United States is ahead of the global curve when it comes to delivering “broadband for all.” But we too face challenges. First, a quick snapshot: 93% of Americans have access to fixed broadband with a speed of at least 25 Mbps down. An estimated 73% of Americans subscribe to fixed broadband at home. And approximately 80% of Americans use smartphones. When you dig deeper into those numbers, however, you begin to see some real divides. In urban areas, 98% of Americans have access to high-speed fixed service. In rural areas, it’s only 72%. 93% of Americans earning more than $75,000 have home broadband service, compared to only 53% of those making less than $30,000. Too many identify with the lines in One of Us, in which ABBA sang: “One of us is lonely / One of us is only / Waiting for a call.”

Every American who wants to participate in our digital economy should be able to do so. Access to online opportunity shouldn’t depend on who you are or where you’re from. I’m pleased to say that since my first days as Chairman, the Federal Communications Commission has taken significant actions to make that a reality.

The week of June 19 was Technology Week at the White House, and the Trump Administration held events focusing on modernizing government technology and stimulating the technology sector.

That Monday, June 19, the White House invited major tech leaders and university presidents for the inaugural summit of the American Technology Council. Hosted by the White House's Office of American Innovation, the event consisted of multiple breakout sessions to discuss ways to modernize the government by retiring out-of-date legacy systems and increasing the use of shared services. On Tuesday, United States Secretary of the Treasury Steven Mnuchin and Director of the National Economic Council Gary Cohn held a listening session with technology leaders to discuss tax reform in the United States and the implications of a new tax plan on the technology sector. On Wednesday, President Trump traveled to Cedar Rapids, Iowa. He toured Kirkwood Community College and spoke about agricultural innovation and empowering the American farmer. On Thursday, the White House hosted the American Leadership in Emerging Technology Event, where American tech industry leaders demonstrated technologies like advanced drones and 5G wireless networks to the President. On Friday, President Trump signed the Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017. After a successful week of addressing American innovation and meeting with leaders of the technology sector, next week the Trump Administration will turn its focus to energy.

Expanding high-speed internet access to rural areas has been one of the few issues that’s drawn bipartisan support in a sharply divided Congress. And while nothing’s assured, backing by Federal Communications Commission Chairman Ajit Pai may help push those congressional efforts across the finish line.

Chairman Pai recently talked up the Senates Gigabit Opportunity Act (S 1013), that would effectively legislate his proposal for spurring broadband investment in remote areas, where internet access is available through 1990s-era dial-up service. The legislation — introduced May 3 by Sen Shelley Moore Capito (R-WV) and co-sponsored by Sen Chris Coons (D-DE) — would provide tax benefits for investments in “gigabit opportunity zones,” primarily in low-income and rural communities. On the other side of the Capitol, Rep David Loebsack (D-IA) introduced related legislation, the Rural Wireless Access Act (HR 1546), which would require the FCC “to establish a consistent methodology for its collection of coverage data about the available speed tiers and performance characteristics of commercial mobile and data service” for use in deciding on the eligibility of areas that can receive funds from the FCC-administered Universal Service Program or similar initiatives.

Attendance at the June 22 House Small Business Committee's Subcommittee on Agriculture, Energy & Trade hearing on improving broadband deployment in rural America was small, but it was yet another dive into a crowded pool as Washington drilled down on the issue, including on Capitol Hill, at the Federal Communications Commission and even in Iowa, where the President talked up rural broadband as well.

The chairman of the subcommittee, Rep Rod Blum (R-IA), is from a rural district and also owns a small technology company that relies on internet access, so he cautioned the audience not to read the light attendance as lack of interest, only that there was a lot going on at the Hill. Chairman Blum said "the nation's small telecom providers are the ones that traditionally supply the bulk of broadband services to the most rural parts of America, and that is no easy task."

Students increasingly must gain 21st century technology skills to succeed in life after high school. Despite the technological shift driven by rapid innovations, approximately 5 million US households with school-age children still do not have access to high-speed Internet at home. The paper gives school leaders guidance to improve digital access in their communities.

In addition, CoSN puts forth recommendations for districts to build and strengthen their networks and identifies funding opportunities for school systems to improve digital equity. These include leveraging capital expenditures, operational expenditures, federal and state funds, bonds, levies, grants, and in-kind and school-to-business partnerships to address digital equity. “School-to-Home” details the main barriers to extending broadband to homes nationwide. These include assessing size of the connectivity problem and addressing the need for adequate Internet access at home and in the community, particularly for students from low-income homes. Despite cost and lack of fiber or high-speed Internet availability, some districts are improving Internet access by promoting public Wi-Fi access, providing Internet in school parking lots and athletic fields, and establishing portable loaner Wi-Fi hotspots for student use to take home to do school work.

Federal Communications Commission Chairman Ajit Pai was spotlighting the news that Sen Chris Coons (D-DE) has signed on as a cosponsor of the Gigabit Opportunity (GO) Act. The bill was introduced in May by Sen Shelley Moore Capito (R-WV). The bill would give tax breaks to companies for investing in gigabit-capable expansion into those communities; direct the FCC to release a framework that encourages states, counties and cities to voluntarily adopt streamlined broadband laws and be designated as a “Gigabit Opportunity Zone;" and defer capital gains for upgrades and allow companies to expense the cost of creating those zones, as well as allow states to more easily issue tax-exempt bonds.

In a statement released after the news of Sen Coons' support, Chairman Pai said: “Closing the digital divide is a top national priority. Gigabit Opportunity Zones would go a long way toward meeting that priority. By streamlining regulations to encourage broadband deployment and establishing targeted tax incentives for entrepreneurs to build those networks, we can empower millions of Americans, rural and urban alike. This is a common sense idea, and I’m excited to see it gaining bipartisan support."

Nearly a quarter of the city-dwelling population in the US isn’t connected to broadband internet, according to a recent IHS Markit and Wireless Broadband Alliance study charted for us by Statista. To be clear, the US is doing a better job at making the internet available to its urban population than many other large nations. But the disconnect that does exist is what happens when you mix the relatively high costs of entry for broadband in America with the number of lower-income people living in cities in the first place. As the study notes, this simply makes it difficult for those people to participate in society at the same level.