Disagreement Likely on Open-Access Rules for Stimulus Grants

“Make no mistake: We are participating in a milestone event in Internet policy,” said Ben Scott, the policy director of Free Press. “For the first time since the misguided deregulatory policies of the early 2000’s we now have clear instructions from the Congress and President to safeguard an open Internet.”

The public has the right to expect that the agencies will impose tough network neutrality conditions, Scott said. “The federal government is not a charity,” he said. “Taxpayers put money into broadband infrastructure only insofar as it serves the public interest. This is not a blank check.” Fifteen thousand Free Press members have sent letters to the NTIA over the past week demanding strict nondiscrimination protections, he said. “The record is very clear and the choice is very clear,” he said.

Public Knowledge President Gigi Sohn said “the plain language” of the stimulus law requires open networks and the NTIA and the RUS should adopt tough rules. Carriers usually complain that if their networks are required to be open, they're less likely to make investments, she said. “The evidence is to the contrary,” Sohn said. “For the 70 years that the law required nondiscrimination, network providers invested. Some would say they even over-invested.”

Carriers continue to pour money into their networks, Sohn said, noting that AT&T in 2009 alone plans to spend as much as $18 billion on broadband infrastructure. Clearwire, a wireless operator with a “business model based on openness,” has plans to invest $1.5 billion to $1.9 billion this year, she said.

James Assey, NCTA executive vice president, said the NTIA and the RUS shouldn’t require anything beyond adherence with the FCC’s 2005 nondiscrimination policy statement. “If we go beyond the status quo in layering on new and untested conditions, we are going to deter the very people that are best positioned to roll out broadband infrastructure in unserved areas and to focus on strategies that will spur adoption,” Assay said. He said the agencies should not “reinvent the wheel” since the FCC already has an extensive record on open access.

Open access and other grant conditions must be balanced against “the need to create jobs, to stimulate the economy, and to foster broadband deployment to unserved and underserved areas,” said Chris Guttman-McCabe, CTIA vice president for regulatory affairs. The goal must be to get the stimulus money into the economy, “not to spend the next several months debating these issues… in tortured detail,” he said. The debate over net-neutrality rules has been going at the FCC for years, he said. “The idea that we are going to accelerate that process and make a decision in the next weeks, several weeks, is concerning to us.”

Jonathan Banks, USTelecom senior vice president for law and policy, said the program targets areas without broadband, which will be difficult and expensive to serve. “The operating costs of maintaining these networks and providing broadband in these areas are very, very high,” Banks said. “Additional costs and additional risk are not helpful to getting broadband out to these, the most difficult areas to serve in the country.”

During an afternoon panel on the role states should play in ARRA broadband grant making, NARUC General Counsel Brad Ramsay said the NTIA and the RUS should, for practical reasons, use states as advisers and monitors a great deal. Summarizing a new official NARUC position, he said the federal agencies should let each state rank broadband projects proposed to be carried out in it. The agencies should consider putting some of the 3 percent of broadband stimulus money for administrative costs in state hands to help cover their expenses, such as by underwriting two to four state-level positions for evaluating proposals and monitoring the performance of grant recipients, Ramsay said.

Governors want detailed plans before the NTIA and the RUS give out money, so states should have a role in evaluation, said David Parkhurst, the staff director of the National Governors Association. Governors are willing to vouch for applications through certifications, he said, emphasizing the need for state and federal governments to work together and governors’ desire to avoid unintentional interference by the federal government with state broadband efforts.

The NTIA should develop grant criteria with the states and then decide which grants to award, said Wes Rosenbaum, an official of the Bristol, Va., utilities system. No matter what states’ role is, the interests of the elderly and other digitally disadvantaged groups should be kept in mind, said Sandy Markwood of the National Association of Area Agencies on Aging.

The NTIA and the RUS should ensure that state participation doesn’t keep the grant process from carrying out the requirement of the stimulus law to encourage participation by minority businesses, said Russell Frisby. He spoke on behalf of the Minority Media and Telecommunications Council. He endorsed a suggestion from the floor that the agencies adopt Small Business Administration tests for minority-business status.

In working with states, the NTIA and the RUS should regard Indian tribes as the sovereign bodies they are, not as political subdivisions of states, said Diana Bob, a staff attorney with the National Council of American Indians. “States have no vested interest in directing federal funds to the tribes,” Bob said. State planning historically has tended to overlook tribal lands, she said. If broadband stimulus work follows that pattern, large expanses of some Great Plains states will miss out on build-out, she predicted. To keep “pockets of exclusion” from developing, the NTIA and RUS should offer states incentives to consult with tribes or impose conditions on them, such as requiring states to demonstrate that they have reached out to tribes, Bob said. “Tribes aren’t opposed to working with states. But we know from experience that it’s not going to happen on its own. There are plenty of bad models out there.”

During the public comment period, NARUC’s Ramsay asked the NTIA and the RUS not to make perfection the enemy of the best practical decision-making possible. To questions from several angles about the risk that states will have a conflict of interest, as both applicants for federal grants and advisors on which grants should be awarded, Ramsay said the law says the decision is the NTIA’s. Parkhurst and Frisby agreed. “NTIA is the final arbiter,” Frisby said. “The overarching issue is accountability and transparency,” said Parkhurst. “I don’t see it being easy for a conflict of interest arise under those Klieg lights.” Ramsay predicted that large projects and those involving multiple states are likelier to be endorsed by the states involved and to be approved by the federal agencies “Larger projects have the advantage of increased prospects of sustainability,” he said.

Panelists said the NTIA and RUS stimulus programs don’t favor incumbents but do give an advantage to applicants that can point to success in planning and carrying out broadband projects. “After you fund the capital outlay, you have to be able to pay the bills,” Rosenbaum said. “A track record is going to be very important.”

A roundtable discussed how the government should use broadband mapping to further the stimulus program’s goals. The law requires the NTIA to develop and maintain a comprehensive broadband-availability map that is interactive and searchable.

Maps should include information on prices, quality, availability and competition, said Sharon Gillet, commissioner of the Massachusetts Department of Telecommunications and Cable. They should also include social data, including statistics on poverty, unemployment, race and language, said Aimee Baldillo, a director at the Asian American Justice Center. The information would help the center understand why some Chinese and Korean neighborhoods in Los Angeles and San Francisco don’t have high-speed broadband, for example, she said.

The NTIA must ensure that maps reflect consistent measurements of speed, service territory and other matters, panelists said. Data-collection methods must be uniform, so the results can be combined easily into a national map, said John Horrigan, associate director for research for the Pew Internet Project. Consistency will make maps more “user friendly” for consumers, and it’s critical for researchers, he said. Alan Roth, USTelecom senior vice president, said the NTIA should create a map template for states but shouldn’t impose a “straight-jacketed” system requiring specific measurements, since state needs may differ.

As it works on a national map, the NTIA should look at current state mapping efforts, said Erin Lee, a program director for the National Governors Association. States can provide “a lot of useful information” to move federal mapping faster, she said.

Some speakers worried about openness. A map to be used for deciding on public funding should be subject to public review, said Gillet. Mapping should be done by a public agency with transparent and verifiable data, said Art Brodsky, communications director of Public Knowledge. Government agencies should be wary of data supplied by business, he said. In the past, carriers “have cloaked their data submissions under veils of proprietary and confidential information,” he said. “Maps made from selective data put forth grudgingly by carriers that can’t be verified are quite simply useless.”