CN Applauds Connect America Fund Creation

Connected Nation's CEO Brian Mefford offered the following statement on the FCC's Connect America Fund:

Connected Nation congratulates and commends the Federal Communications Commission today for creating the Connect America Fund. Too many parts of our country simply do not have access to broadband networks, and closing that gap is particularly important for the economic development and vitality of our nation's rural areas. Funding for infrastructure is often a crucial missing piece in our community engagement program. We look forward to working with the Commission, our state partners, industry, and anchor institutions like schools and libraries in helping the communities Connected Nation serves overcome this substantial gap.

FCC to Create $4 Billion Connect America Fund

By Tom Koutsky, Chief Policy Counsel, Connected Nation

Every year, the FCC's Universal Service Fund provides over $4 billion for telephone companies to provide voice service in "high-cost" areas. A companion program compensates providers for completing telephone calls, with rates that vary based on technology used to make the call, be it a wireless phone, a traditional telephone, or an Internet service like Skype.

Forms of this program have been in place for over 95 years - a time when about 13 percent of U.S. households had a telephone, about 7 million dialtone lines - about the same number of iPhones that Apple expects to sell this month.

As consumers and businesses have adopted broadband, cracks in those creaky voice service subsidies are widening. The result is that while over $8 billion per year - funded by a 15 percent fee on everyone's phone bill - is spent on this program, immense gaps have emerged:

•18 million Americans do not have access to broadband networks. In places like Alaska and Tribal Lands, these access gaps are wide.

•Over 100 million Americans have not adopted broadband at home - one-third of the country. For low-income households, adoption is nearly half that rate, 38 percent. In Puerto Rico, the vast majority of schoolchildren do not have home broadband service.

•High-speed broadband by Community Anchor Institutions is not keeping pace. For example, according to the American Library Association, 45 percent of all public libraries say their broadband connection speed is insufficient for needs. Only one in five rural libraries have a fiber optic connection - and only two-thirds of urban libraries have such connectivity.

•Create a $150 million Tribal wireless fund, which will include Native Villages in Alaska, and propose to create a dedicated remote area fund.

Today, the FCC is attempting to start to close the access gap, particularly in high-cost, rural areas. The federal USF funnels approximately $4.7 billion per year in subsidies for carriers to provide voice service. Shifting that program to support broadband networks instead will be complicated, messy, and contentious. Essentially, the FCC's goal is to re-cut the pieces of that $4.7 billion-sized pie and redistribute it among broadband and voice segments.

We will be following the FCC's decision today and summarizing it here. We expect that the FCC will announce:

•A plan to use broadband mapping data to identify areas of the country without broadband and shift $4 billion away from voice subsidies to fund network construction in those areas in the next five years.

•Create a $300-400 million per year Mobility Fund that will fund wireless infrastructure projects in communities without adequate wireless data service, and

•Transition the current per-minute intercarrier regime to a uniform rate system.

Stay tuned here for more details as the FCC takes its vote and releases more information.

Making Universal Service Truly “Universal”

By Tom Koutsky, Chief Policy Counsel, Connected Nation

This month the Federal Communications Commission is poised – at last – to take a strong and definitive step forward in shifting the nation’s complex subsidy system for telephone service to one that directly supports broadband. Reforming this system is important, as there are significant differences in broadband availability across the country. Undertaking that reform is difficult and complex – as one would expect with any $8.7 billion per year subsidy program.
But as a society, we cannot not lose sight of the gaping broadband adoption and utilization gap.

As Connected Nation’s Consumer Broadband Adoption Trends report shows, more than 1/3 of Americans have not adopted broadband. Wide swaths of our society are at risk of being left behind – an Internet underclass that could have a longstanding, significant, and detrimental economic and social impact.
Even a sample of these gaps is startling:

• 31.6 million rural residents do not subscribe to broadband – more than the population of Texas and Wisconsin combined.
• Only 38% of low-income households in Iowa have broadband at home.
• Only 15% of low-income seniors in Nevada subscribe to broadband.
• 17 million children don’t broadband at home, 7.6 million of them in low-income households.
• Barely half of Hispanic households (51%) subscribe to broadband.
• 15.4 million adults say that the lack of digital skills is the reason they don’t subscribe to broadband.
• Our study also shows that the barriers to broadband adoption are complex – cost is important, but so are digital skills, training, and awareness.

To achieve truly “universal” broadband, our society needs to do more than make sure that broadband networks are available – we need to make sure that adoption and use is universal as well. While networks are expensive to build, building them may in fact be the easy part – cracking the code on making sure all Americans use this technology is the key to unlocking the economic and social value of those networks.

To meet this challenge, last week Connected Nation was pleased and proud to have joined with the FCC, private companies, and other noted non-profits in the Connect To Compete initiative, which will promote digital literacy efforts nationwide.

And yesterday, Connected Nation, with the Minority Media and Telecommunications Council and One Economy, have endorsed an innovative approach to broadband adoption suggested by Aspen Institute Fellow Blair Levin, leader of the National Broadband Plan effort. Because the nation’s adoption and use challenge is multifaceted, this proposal would provide federal support to a myriad of both large and small-scale public-private adoption programs. Support for public-private adoption programs would be awarded through a competitive application and review process, similar to the Department of Education’s Race to the Top and Investing in Innovation (i3) grant programs.

These adoption programs can and should work in concert with subsidies for building networks. A low adoption rate directly affects the economics of broadband deployment.

One example is Puerto Rico, where we are working directly with the government and stakeholders in their broadband strategic plan. Forty percent of Puerto Rico households are below the poverty line, and the overall household broadband adoption rate is only 31%, less than half of the national average. Does anybody doubt that these low adoption numbers help account for the fact that broadband availability in Puerto Rico, at even the most basic of speeds, is far, far behind every state? And since it’s so obvious, wouldn’t it be foolish to subsidize network construction in Puerto Rico without establishing a comprehensive broadband adoption and training program at the same time?

The pattern applies across the country. Low adoption rates are partly responsible for lagging investment in broadband capacity. As such, promoting adoption should be an integral part of the FCC’s strategy to ensure universal broadband access at ever higher speeds. This is why Connected Nation and our partners support Blair Levin’s proposal.

Connected Nation Applauds FCC’s Proposal to Direct Broadband Funds Using National Broadband Map

Washington, DC – The following is a statement from Connected Nation in response to today’s USF reform proposal by the FCC to use the national broadband map to determine unserved areas eligible for USF funds.

“The FCC's proposal to distribute broadband support subsidies to unserved areas identified on the national broadband map is a landmark development that will help bring broadband to all Americans.

Connected Nation has been working with states and the NTIA to make the national broadband map a comprehensive, accurate, and transparent tool for policymakers and the public. We look forward to working with the FCC, NTIA, and our states to maintain a high standard of excellence in developing and cultivating this unprecedented data resource.”

Download statement

FCC Holding Open Meeting to Rule on Universal Service Fund reforms

On Tuesday, February, 8, the Federal Communications Commission will hold an open meeting in Washington, D.C., in which it will vote on proposed Universal Service Fund reforms.

Tom Koutsky, Connected Nation’s Chief Policy Counsel, will be attending and live tweeting from the meeting, which is scheduled to begin at 10:30 a.m. EST. In adding, the FCC will be live streaming the meeting FCC.gov/live.

For more information, read FCC Chairman Julius Genachowski's proposal to shift federal universal service subsidies to connect America to broadband.

Follow us on Twitter at www.twitter.com/connectednation to see our take on the meeting.

Related Articles
News: FCC Seeks Overhaul on Rural-Telecom Fund (Wall Street Journal, 2/7/2011)

Broadband Mapping Key to Informing the USF Debate

By Raquel Noriega, Director Public Policy, Connected Nation

Legislating Broadband Policy panel at the 2011 State of Net Conference featuring John Branscome, Senate Transportation & Commerce Committee; Roger Sherman, House Committee on Energy & Commerce; Brian Hendricks, Senate Transportation , Science & Commerce Committee; Neil Fried, Energy & Commerce Committee; and Kim Hart, Politico Reporter and Moderator.

This week, broadband stakeholders gathered in Washington, D.C., to discuss the country’s communications policy agenda at the 2011 State of the Net Conference. During a panel titled, “Legislating Broadband Policy,” key Capitol Hill staffers from both parties discussed the top communications policy priorities in the new Congress.

Both majority and minority professional staffers for the House Energy & Commerce Committee and the Senate Transportation, Science and Commerce Committee agreed that, where communications policy is concerned, there are a number of bi-partisan goals of the new Congress. The top areas where bipartisan opportunities for action exist include a review of spectrum policy in order to meet the National Broadband Plan’s objective of releasing 500 MHz of spectrum for private use (which should encourage innovation and broadband deployment as well as ensuring that the nation is well prepared to meet the challenges of public safety in the twenty-first century), as well as the Universal Service Fund reform and Intercarrier Compensation rules currently under review at the Federal Communications Commission.

Key areas of debate within the USF reform discussions include the types of services that should be subsidized within the USF program and which areas and communities should be eligible for subsidies. Should it be unserved areas where no service is currently offered, underserved areas, or areas where service may be available but at low speeds, or all of them? Either way, the key to effectively implement such programs will be based on data soon to be released by the Department of Commerce providing an inventory of broadband infrastructure.

Connected Nation is working with the Department of Commerce across 12 states and Puerto Rico to produce and update the national broadband map scheduled for release no later than February 17 of this year. This national broadband map will be a first of its kind. The rich data collected from broadband providers across the country will offer local, state, and federal policy makers an objective, reliable assessment of the current state of broadband inventory in every community across the country. This data will be essential to understanding the extent of the Universal Service challenge and to ably administer the new, reformed programs.

Connected Nation offers here some insights from broadband inventory data across the states we have mapped. The key lesson learned is that no state and no community is alike when it comes to the broadband landscape. For example, these data show many states (like Iowa, Michigan, Nevada, and South Carolina) have robust service at basic speeds, but are not in a position to meet the high-speed 50 Mbps to 100 Mbps levels of service anytime soon. Whereas other states (such as Texas, Minnesota, and Kansas) have relatively mature high capacity networks with more than 40% of households having access today to broadband of at least 50 Mbps download speeds.

Click on image to enlarge

Staffers from both sides of the aisle agree that this broadband mapping data will be essential to the implementation of a reformed USF program and the proposed Mobility Fund. Connected Nation looks forward to continuing to work with the federal government, state policy makers, and private stakeholders to update and continue validating these broadband inventory maps and placing this first-of-its-kind, rich dataset at the service of policy makers and broadband stakeholders.

Related Links:

Download ‘The State of the Broadband Market’ (pdf)
Blog: Broadband Infrastructure Varies Greatly By State
Blog: Connected Nation at 2011 State of the Net Conference: Day 1