During his presidential campaign, President Biden committed “to build back better in rural America” by “expand[ing] broadband, or wireless broadband via 5G, to every American.” Last month, President Biden renewed his focus on “universal broadband” through the announcement of a bipartisan agreement for a large infrastructure bill that highlights broadband connectivity. Between setting the goal and realizing congressional appropriations to implement his “Build Back Better” initiative, federal (and in some situations, state) regulators have also confronted several important broadband infrastructure issues this year as they balance an understandable desire for competition and choice among broadband networks and service offerings against the practical challenges and economic realities of broadband deployment. What progress has the Biden Administration made so far?
Broadband is more important now than ever. According to a 2021 report by Parks Associates, 41% of US broadband households have been working or attending schools remotely, with the COVID-19 pandemic having driven approximately 7.2% of those households to upgrade their broadband network last year. Terabytes of data are communicated and shared every second through broadband Internet platforms – the most ubiquitous means of communication and connection.
The United States has always depended largely on private investment by telecommunications carriers, cable companies, wireless Internet service providers and others to construct and operate wired and wireless broadband networks. Because of its benefits to end users of all types, policies that support the availability of broadband connections for everyone are increasingly popular in the era of remote work and schooling.
But networks can be expensive to build and to maintain where there may not be sufficient customers available to defray the costs of entry and operation, such as in rural or other high cost areas. For example, burying conduit underground and overlashing fiber onto utility poles are expensive undertakings measured linear foot by linear foot. Companies typically only consider it feasible to enter a market if they can identify a realistic possibility of recouping their investment. If a market already has several broadband providers with the same types of facilities, there likely are only a limited number of customers that might be willing to switch to a new provider or become first-time broadband users. This can deter new facilities-based entry. This is one of many examples that illustrates that broadband access and affordability issues are complex and interrelated. The amount of investment required to serve a small number of customers or a large service area footprint can pose a challenge to any public policy goal of ubiquitous, competitive networks and service offerings.
Providing Subsidy Support in Unserved or Underserved markets
The FCC, other federal agencies and many state public service commissions have for many years recognized the difficulty in some geographic areas to provide high-speed broadband connection on an economic basis; they have adopted programs that subsidize entry to unserved or underserved markets, first through the public switched telephone network and more recently through broadband connections enabling remote learning, telehealth applications and continuity of business operations. Following a Congressional mandate in 2009, the FCC released a National Broadband Plan. Some but not all of that plan has been implemented, but there remains an issue about how well these programs are calibrated to detect and solve a lack of robust service options.
More recently, the FCC has attempted to auction off broadband subsidies in exchange for commitments by auction winners to serve designated high cost areas with minimum specified broadband services. And the Biden Administration and Congress are poised to provide $65 billion more to the FCC and the Department of Commerce to construct broadband infrastructure in unserved and underserved areas identified by the FCC’s new broadband data maps to be updated with 2020 Census information (see broadband data map and a new mobile broadband map for the most recent versions), collaborate with state governments and establish subsidies programs to be available for businesses and consumers to participate under the Build Back Better infrastructure initiatives.
Local governments have a more direct and sometimes complicated relationship with entities seeking to deploy and operate broadband networks. Their role includes management of public rights of way, and this can often put cities in conflict with wired and wireless service providers seeking to deploy services that need prompt and predictable access to poles, conduits and city streets. Cities by and large understand however that the presence of robust affordable broadband offerings can enhance their ability to attract businesses and newcomers.
Affordability of Service Offerings
The goal of “universal service” can only be realized if the providers make broadband network and services available and affordable. Some recent COVID-19 programs, such as the Emergency Broadband Benefit (EBB), have been funding up to $50 per month in discount for a household broadband connection ($75 per month for qualified tribal households) and up to $100 in one-time discount for the purchase of devices. The FCC also launched application for a $7.17 billion Emergency Connectivity Fund that provides financial support to schools and libraries to purchase laptops and tablets so students and residents in the communities can more readily access broadband Internet where such connectivity is lacking. As of late September 2021, over six million households are enrolled to receive discounts provided by nearly 1,200 broadband providers in the EBB program while thousands of schools and libraries have been awarded over $1.2 billion funding in the Emergency Connectivity Fund program.
Legislators and policymakers are also working to take additional steps in addressing the affordability gap between the concept of universal availability and universal service – for example, Congress is poised to provide an additional $14.2 billion in funding to extend the EBB program through an “Affordable Connectivity Benefit Program.”
Streamlining or Modernizing Regulatory Requirements to Promote Competition While Ensuring Consumer Protection
Another factor complicating the economics of broadband deployment are regulatory burdens such as permitting requirements for a new provider’s entry of market, a new site buildout, or the ability of building owners and managers to enter into exclusive service arrangements with a single broadband provider that effectively precludes the ability of other providers from offering comparable services to building tenants.
Following President Biden’s July 9, 2021 Executive Order that called for actions against lack of adequate competition in the telecommunications sector to address the problem that “Americans . . . pay too much for broadband, cable television, and other communications services,” the FCC recently sought another round of public comments on whether the current framework that generally permits exclusive arrangements with providers in multi-tenant buildings is outmoded and should be revised. The House of Representatives also proposed to review federal agencies’ progress on streamlining federal requirements on broadband siting permitting.
In the meantime, federal and state agencies have placed increased emphasis on identifying and addressing gaps in consumer protection in the broadband Internet ecosystem. In addition to legislative movement to modernize the Universal Service Fund program by requiring providers of internet-based services to contribute to universal broadband deployment, several state governments (such as New York and California) have also been considering laws or regulations to extend service quality standards requirements from traditional telecommunications services to broadband services.
Finally, Broadband Networks Need to be Secure Networks
With broadband connection brings the threat of hacking and other security compromises. The United States has for several years focused on the potential of national security risks posed by foreign-owned communications infrastructure, equipment or services. Following the former Administration’s Executive Order on Securing the Information and Communications Technology and Services Supply Chain, the FCC’s November 2019 initiation of a series of year-long “rip and replace” actions to require that telephone companies receiving any federal universal service funds remove designated equipment made by Chinese companies ZTE Corporation and Huawei Technologies Company from their networks, and the March 2020 enactment of the Secure and Trusted Communications Network Act, the FCC has not slowed down its pace.
Immediately following the 2021 presidential inauguration, the FCC circulated a new draft of a Third Further Notice of Proposed Rulemaking in the “rip and replace” proceeding, which was ultimately adopted in July 2021 as formal FCC rules following six months of public comments. Meanwhile, the FCC has identified an initial list of “covered equipment and services” that that are deemed to pose an unacceptable risk to the national security” and set up a formal Secure and Trusted Communications Networks Reimbursement Program, to be administered by Ernst & Young LLP, with allocated funds to reimburse providers for the costs of this “rip and replace” requirement. To help affected businesses with participating in the program, the FCC has published several guidance documents, including the program procedures Frequently Asked Questions, Program Infographic, and best practices for covered equipment disposal. And the FCC’s role in ensuring network security in an interconnected world will not stop there.
In sum, the market for broadband networks and services in the United States is complex and dynamic. Despite the focus on broadband deployment and availability at all levels of government, there are many reasons why the goal of ubiquitous, secure, affordable broadband service with a choice of providers remains a work in progress well after the goal was identified.