April 11, 2018 - 3:15 pm
By Michael O'Rielly | Commissioner

Over the years, I have spent a considerable amount of my time at the Commission focused on improving broadband deployment, particularly in rural and remote parts of the nation that have no access or remain on slow dial-up service.  In these communities, where there is little to no business case to extend broadband, the FCC’s federal universal service fund (USF) programs can make connecting consumers and local businesses possible.  Indeed, as the Commission has steadily reformed its USF programs to bring forward market efficiencies and stretch spending further, it has generally prioritized its annual $4.5 billion high-cost fund to these unserved communities, where new access to broadband can be the key to attracting and retaining residents and companies.  These efforts are already bearing fruit, and millions more unserved Americans will have the opportunity to obtain broadband service over the next 10 years.  More work must be done, however, to reach the farthest and most costly areas of our nation. 

With the recent passage and enactment of the Consolidated Appropriations Act, 2018 (P.L. 115-141), Congress made available $600 million for additional broadband deployment, particularly targeted at America’s rural areas.  This funding is to be administered by the U.S. Department of Agriculture’s Rural Utilities Service (RUS) in the form of a pilot program.  Overall, the new program could be instrumental to filling coverage gaps in rural America not yet addressed by private companies and the FCC’s USF programs – but only if it is implemented in a thoughtful and coordinated manner.  

Fortunately, Congress directed that the funding be used for projects in predominately unserved areas.  Specifically, the law states that “at least 90 percent of the households to be served by a project receiving a loan or grant under the pilot program shall be in a rural area without access to broadband, defined for this pilot program as 10 Mbps downstream, and 1 Mbps upstream.”  These qualifications should help avoid the pitfalls of prior stimulus funding efforts, where the insertion of new dollars, in some instances, were spent on duplicative construction rather than maximizing coverage across truly unserved areas.  The new statute also includes an important protection against overbuilding other RUS program participants. 

In addition, for this program to be truly successful and help as many Americans as possible without service today, it is imperative that RUS coordinate with the FCC to ensure the implementation of regulations prevent any overbuilding of USF funding recipients.  By working in a complementary fashion, these programs can help providers extend and sustain broadband into the most rural parts of the nation.  For instance, the FCC has lacked the funding and resources to complete its Remote Areas Fund (RAF) proceeding, which was intended to bring service to the hardest to reach portions of the United States.  If the RUS pilot program can reach into these RAF or RAF-like areas, then the country will be much closer to achieving the objectives of universal service. 

Without careful planning, however, valuable funding could be wasted duplicating service, distorting competition, and undermining the viability of existing and ongoing efforts to extend broadband.  Coordination is particularly important given key differences between the programs.  Unlike traditional grant programs, USF funding is distributed over a longer timeframe.  Additionally, while USF recipients are required to meet deployment milestones and report new broadband service, they have some flexibility on which areas are built out and when within the overall timeline.  Therefore, parts of a USF recipient’s service territory that appears to be unserved today should not be considered unserved if they are required to be built-out within a specified timeframe.  These are precisely the types of areas that RUS should be on the lookout to avoid overbuilding.  Similarly, the projects selected by RUS should prevent cherry-picking and a hollowing out of the economic epicenters of small communities, leaving another program, such as USF, to pick up the surrounding portions at much greater costs.   

It is equally important for the FCC to understand how the RUS pilot program funding is being spent.  There are several programs that promote and enable broadband deployment and operation within the high-cost or Connect America Fund umbrella.  Some programs are already underway; some are about to commence in the form of upcoming auctions, and some have yet to be implemented.  Just as I hope that RUS will not duplicate the work of the FCC, I also want to ensure that we have the necessary data to ensure that a recipient of USF support from the FCC does not overbuild a different company receiving funding from the RUS pilot program.

Along those lines, it will be important for both agencies to work with the National Telecommunications and Information Administration (NTIA) on data on current and future broadband funding commitments so that the broadband map developed pursuant to this legislation provides the most accurate information possible regarding any remaining unserved areas.

 

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By sharing information and data on our respective programs, the FCC and RUS can provide valuable insight into which areas should receive support, helping to target funding in a cost-effective manner to places that need it most.  I hope that RUS will take advantage of this opportunity, and I stand ready to assist in any way.