Senate Communications Probes USF Broadband Funding Troubles, Coverage Data Issues
Additional fixes to FCC funding for USF programs that impact broadband deployment in rural and remote areas are needed to overcome ongoing shortcomings, said lawmakers and industry experts Tuesday at a Senate Communications Subcommittee hearing. Lawmakers noted concerns with USF's “stand-alone broadband” problem and the high-cost fund, as expected (see 1706160055), and questioned the accuracy of current broadband service measurements. The subcommittee also considered the FCC's Rural Health Care program.
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“Challenges within” USF persist despite the FCC's 2011 USF and intercarrier compensation overhaul order and the 2016 rate-of-return (RoR) USF support mechanisms revamp, said Chairman Roger Wicker, R-Miss. The challenges, including USF's “ability to support meaningful investments into broadband deployment and conduct necessary maintenance on established networks,” resulted in a “disparity” between urban and rural areas' broadband service quality, he said. Ranking member Brian Schatz, D-Hawaii, urged the FCC to “remain vigilant against waste, fraud and abuse” of USF programs to maintain the goals of past overhauls. The FCC also must ensure USF broadband funding “goes where it is needed the most,” particularly rural and remote areas, Schatz said.
Wicker and others cited concerns about inadequate broadband service data collection practices, which Wicker said played a role in “inefficient distribution” of USF funds. He and others highlighted their Rural Wireless Access Act (HR-1546 and S-1104), which would force the FCC to ensure standardized data collection for USF support eligibility (see 1705110060). Sen. Gary Peters, D-Mich., another S-1104 co-sponsor, said he hopes the Senate Commerce Committee will take up the bill “shortly” given the importance of addressing “incomplete and inaccurate” broadband coverage data.
C Spire Senior Vice President-Strategic Relations Eric Graham highlighted limitations of current commission broadband measurement practices, saying they prevent an “apples-to-apples” comparison. “Without knowing” the extent of coverage in a particular area, it's difficult for the agency to “put together a model” of the costs for serving unserved areas, Graham said. He also cited an imbalance in the sources of USF contributions as an ongoing issue. Schatz called contribution reform the “elephant in the room” and encouraged lawmakers and stakeholders to “have an adult conversation.”
Sens. Shelley Moore Capito, R-W.Va., and Deb Fischer, R-Neb., were among those raising concerns about USF ongoing funding challenges. Universal Service Administrative Co. recently projected the total 2017-18 budget for high-cost program and Connect America Fund broadband funding will be more than 12 percent below the forecast funding demand. Capito, who chairs the Appropriations Financial Services Subcommittee, said during that subcommittee's FCC FY 2018 budget hearing she's also concerned about USF funding and accountability issues (see 1706200082). “Broadband should be easily available and affordable,” she said. Capito pointed during both hearings to her Gigabit Opportunity Act (HR-2870 and S-1013) as a potential funding solution. The bill would provide tax deferral and immediate expensing for telecom companies putting money toward gigabit-capable broadband (see 1705030029 and 1706120065).
NTCA CEO Shirley Bloomfield urged the FCC to consider leveraging existing USF mechanisms to address ongoing funding challenges, including tapping USF program funding reserves. Congress also could supplement USF funding as part of a broadband title in an upcoming infrastructure package or could create new grant and investment programs to target rural areas where “market failure” makes deployment economically unfeasible, Bloomfield said. Charlesmead Advisors senior partner Michael Balhoff called the FCC 2016 RoR funding overhaul a mistake and said the estimated shortfall for high-cost and CAF funding could be even larger than projected. University of Virginia Center for Telehealth Director Karen Rheuban called for an expansion of the $400 million funding cap for the Rural Health Care program, saying rural telehealth programs are dependent on it for reliable service.