Biden administration telecommunications policy could move U.S. toward universal fiber connectivity

The Biden administration’s telecommunications policy points toward the goal of bringing fiber connections to nearly every American home, recognizing policy put in place 25 years ago with the 1996 Telecommunications Act will not achieve that objective with two thirds of homes still served by obsolete copper telephone lines in 2021.

That goal is not explicitly stated in the Infrastructure Investment and Jobs Act passed by the Senate this month, calling into question the administration’s “build back better” pledge. Many observers including this one viewed that as a capitulation to incumbent telephone -- and particularly cable companies -- and their legacy metallic delivery infrastructures. However, as noted here, the legislation contains language favoring fiber that would be subsidized with $42 billion appropriated to the states should the measure become law. Additionally, the administration is on record as favoring “future proof” infrastructure – essentially fiber – along with universal service.

The infrastructure bill would direct the Federal Communications Commission to convene a proceeding to determine how to achieve universal service and to recommend Congress expand universal service “if the Commission believes such an expansion is in the public interest.”

However, the administration in a July 9, 2021 executive order encouraged the FCC to reinstate its 2015 Open Internet rulemaking that classified Internet protocol delivered services as telecommunications and subject to Title II of the Communications Act of 1934. As such, the services would be regulated as a common carrier utility and a universal service mandate placed on providers that would be required to honor reasonable requests for connections.

While the order is a strong suggestion and not administrative law at this point, the administration can almost certainly implement it when it nominates a candidate to fill the current vacancy on the FCC panel. The administration would most likely select a nominee inclined to implement the order and reinstate the Title II-based rulemaking.

That would set the stage for a policy debate on universal service in the Senate confirmation process. The nominee would conceivably be asked at their confirmation hearing where they stood on universal service considering the Senate’s version of the infrastructure bill would require the FCC to conduct an inquiry on universal service and policy recommendations to Congress.

If the administration is successful in seating a nominee inclined to reinstate the 2015 Open Internet rulemaking, the FCC could preempt Congress on the issue. That is unless Congress chooses to act expeditiously considering the FCC has been unable to conclusively determine whether IP-based services are telecommunications or information services as per their current classification under Title I of the Communications Act.

The significant funding that would be allocated to states by the infrastructure bill as well as that currently provided by the American Rescue Act would provide a sizable initial infusion to help cover capital costs in high-cost areas in order to help attain universal service. However, with a universal service requirement under a Title II regulatory scheme, there would need to be a viable ongoing high-cost area subsidy for both capital and operating costs that does not currently exist as it does for legacy voice telephone service. In the absence of a permanent high-cost subsidy mechanism, federal and state policymakers have defaulted to piecemeal one time grants.