Broadband on Capitol Hill
Although optimism for a broadband infrastructure spending bill this year is fading, it is still a possibility. Senate Minority Leader Schumer (D-NY) and House Speaker Pelosi (D‑CA) plan met with President Trump today to discuss infrastructure legislation. Schumer recently said that an overall infrastructure plan (including broadband and traditional infrastructure such as roads and bridges) would need to be “at least $1 trillion.” Pelosi has said she would like to see funding “closer to $2 trillion.” Reports from the meeting are that President Trump agreed to seek a deal on the $2 trillion dollar figure. While this was suprising, how to fund such a package continues to be a sticking point. House Minority Leader Kevin McCarthy (R-CA) (who was not at today’s meeting), reportedly again rejected an increase in the gas tax and reversal of last year’s tax cuts as a potential source of funding.
NTIA announced in February that it was partnering with eight states (California, Maine, Massachusetts, Minnesota, North Carolina, Tennessee, Utah, and West Virginia) for a limited update of the United States broadband map. The Trump administration’s proposed NTIA fiscal year 2020 budget of $42.4 million is significantly greater than the $33 million proposed last year.
NTIA is presenting a broadband webinar on Wednesday, May 15 that will discuss Leveraging Public Assets to Accelerate Broadband Deployment. The BroadbandUSA Newsletter for April has an article about cybersecurity programs in historically black colleges and is available here.
USDA – Rural Utilities Service
The filing deadline for ReConnect Program 100% grant applications is May 31, 2019. Electronic application submissions are now being accepted through https://www.usda.gov/reconnect. Important application forms are available here. Detailed rules and application requirements are set forth in this important Federal Register notice. Upcoming two-day ReConnect Program Regional Workshops are planned for Oregon, Alabama, and Minnesota. Registration links can be found here.
Federal Communications Commission
Rural Digital Opportunity Fund
Chairman Pai announced a $20.4 billion “Rural Digital Opportunity Fund” at a White House event on Friday, April 12. The new fund will apparently repurpose a portion of existing High-Cost program universal service funding (i.e., the Connect America and Mobility Funds) over a ten-year period in order to connect up to 4 million rural homes and businesses to high-speed internet. Beyond that, details remain sparse. The next step for the Rural Digital Opportunity Fund will be the release of a Notice of Proposed Rulemaking later this year.
USF Spending Cap NPRM
An NPRM is circulating at the FCC that would propose rules to cap overall USF spending – in other words, a cap that would apply to all four programs together, in addition to any program-specific caps. The idea of an overall USF budget has been championed by Commissioner O’Rielly for years and he is the item’s proponent.
Commissioner O’Rielly Seeks Information from USAC Concerning Reported Overbuilding
On April 2, USAC’s CEO responded to Commissioner O’Rielly’s March 7 letter to USAC expressing overbuilding concerns and seeking information about several large E-rate funding requests in Texas, and about funding approvals for large WAN projects generally. O’Rielly’s inquiry was in response to a November 2018 filing on behalf of several carriers in Texas asserting USAC is approving E-rate funding for fiber to schools that already have fiber connectivity.
Wireline Bureau Releases Report on Category 2 Budgets
Before the 2014 E-rate reforms, applicants were eligible for E-rate funding for internal connections (then called Priority 2 or “P2”) in two out of every five years (the two-in-five rule). In 2014, the Commission rechristened P2 funding as Category 2 (C2) funding and, for an initial test period, instituted five-year budgets to ensure more equitable distribution of support among schools and libraries at different discount levels. Before the FCC could consider whether to make the C2 five-year budget system permanent, the Wireline Competition Bureau (Bureau) was required to analyze and report on the effectiveness of the budget approach. In February 2019 the Bureau released its long-awaited report and recognized the benefits of the budgeting approach. Until and unless the Commission acts, however, the C2 budget process is scheduled to sunset after FY 2019.
E-rate Program Amortization Requirement (for Non-Recurring Costs). The FCC on January 29, 2019 issued a Notice of Proposed Rulemaking (NPRM) to make permanent the temporary suspension of the requirement that carriers amortize special construction project costs across three years. The temporary suspension will remain in effect during the rulemaking proceeding.
Rural Health Care Program
USAC has still not released funding year (FY) 2018 (which started July 1, 2018) for most Healthcare Connect Fund (HCF) consortia. Neither the FCC nor USAC have disclosed a reason for the delay, but the reason is most likely that demand has exceeded the $150 million HCF sub-cap which applies to multi-year funding requests and so-called upfront payments (basically, special construction or self-construction). This delay creates is creating serious problems for consortium applicants. SHLB sent a letter to the FCC addressing many of these concerns. New England Telehealth Consortium and Connections Telehealth Consortium (represented by FHH) have sent a letter expressing similar concerns.
The FCC on March 8, 2019 announced the inflation-adjusted caps for the Rural Health Care and E-rate programs. The RHC cap increased from $581 million for FY 2018 to $593.8 million for FY 2019, a 2.2 percent increase. E-rate increased from $581 million to $593.8 million. (The $150 million HCF sub-cap is unaffected by these increases.) The FCC is expected to complete its pending rulemaking in the RHC program this summer.
Educational Broadband Service (EBS)
The EBS NPRM is considering major reforms to increase EBS spectrum utilization (Transforming the 2.5 GHz Band, WT Docket 18-120). The FCC has said there is fallow EBS spectrum across about half of the U.S., mainly in rural areas. The NPRM proposes, among other things, methods to rationalize geographic service areas and asks whether unlicensed EBS spectrum could be auctioned, and whether existing EBS licensees should be allowed to transfer their spectrum to commercial entities (rather than simply lease that spectrum as they do now). Comments and replies have now been filed and the Commission is expected to vote on a final order in June.
On April 10, the House passed the “Save the Internet Act” legislation on a mostly party-line vote (one Republican supported it; no Democrats opposed). The bill would restore the FCC’s 2015 net neutrality rules including classifying broadband as a regulated telecommunications service under Title II of the Communications Act. House Republicans have pushed alternatives that would codify net neutrality rules without reinstating Title II classification for broadband.
- Mozilla Corporation, et al. v. FCC (DC Circuit Court of Appeals challenge to the 2017 Restoring Internet Freedom Order) – Final briefs have been filed and oral arguments occurred in early February.
- Eastern District of California. On October 3, 2018, SB 822, the California Internet Consumer Protection and Net Neutrality Act of 2018 was challenged in federal district court in California by the Department of Justice (DOJ) and several industry groups (in a separate suit). DOJ sought a preliminary injunction but 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.
- Vermont District Court. On October 18, 2018, the same industry groups – American Cable Association (ACA), CTIA – The Wireless Association (CTIA), NCTA – The Internet & Television Association (NCTA), and USTelecom challenged Vermont’s net neutrality law and executive order in federal district court there and in January 2019 sought summary judgment. The parties in March 2019 agreed to stay further proceedings pending a decision in the DC Circuit case (above).
The National Conference of State Legislators (NCSL) features a summary of state net neutrality actions by state in 2019 here (most recently updated in February 2019).
As always, if you have any questions about these updates, please make sure to contact your attorney.