FCC's Wheeler: US needs more high-speed broadband competition | PCWorld

FCC's Wheeler: US needs more high-speed broadband competition | PCWorld: U.S. residents lack meaningful choices for broadband providers that offer 25Mbps or faster download speeds, and the U.S. Federal Communications Commission will push for more competition, the agency’s chairman said Thursday.

While more than 93 percent of U.S. residents have access to a broadband provider, fewer than 15 percent can buy service from more than two wired providers that offer “yesterday’s broadband” with 4Mbps download speeds, FCC Chairman Tom Wheeler said during a speech at Washington, D.C., startup incubator 1776.

“At the low end of throughput ... the majority of Americans have a choice of only two providers,” Wheeler said. “That is what economists call a duopoly, a marketplace that is typically characterized by less than vibrant competition.

As long as Internet service providers own the infrastructure that connects customer premises, there will never be any meaningful degree of competition, owing to the fact that telecommunications infrastructure due to high costs and barriers to entry functions in a natural monopoly market. As Andrew Cohill wrote in his 2010 white paper, that's about as inefficient and senseless as having FedEx or UPS operate proprietary roads to serve neighborhoods that are closed to competing shipping services.

The policy of the United States has been to preserve this very market structure of which the Federal Communications Commission chair laments. What's needed to achieve any level of real competition is to encourage and fund the construction of publicly owned open access fiber to the premise networks where ISPs compete to sell services to customer premises. Call it the public option for telecommunications in the Internet age.

Advocates of municipal broadband face resistance over high-speed access | GazetteNet.com

Advocates of municipal broadband face resistance over high-speed access | GazetteNet.com: Foes, including private Internet service providers such as Comcast, AT&T and Time Warner Cable, have a different view. They say they are spending hundreds of millions of dollars upgrading infrastructure to give high-speed access to every American, and that government shouldn’t compete against private companies, which must pay taxes and make a profit.

The assertion regarding "upgrading infrastructure to give high-speed access to every American" is a false statement. These providers segment their markets and redline neighborhoods deemed less profitable and have no plans to serve them, all the while making promises they cannot stand behind. The reason they cannot is they are constrained by inpatient shareholder investment capital and short term business models inappropriate for high cost capital infrastructure that can require decades to produce a return on investment.

The claim that government is unfairly competing with private sector telecommunications providers is also false in a strict economic sense. Competitive markets are characterized by many buyers and sellers. In telecommunications infrastructure, there are many buyers and users but few sellers, making the market a natural monopoly or duopoly. When the public sector steps in to build and/or finance telecommunications infrastructure, it does so because this market environment combined with the previously mentioned business model limitations of investor-owned telephone and cable companies produces market failure on the sell side. That failure has left millions of Americans unable to order modern Internet landline-delivered services at their homes and small businesses.

Clashing perspectives from core and edge network players show urgent need for Internet policy review

FCC looking into slow Internet download speeds - Yahoo News: "Netflix has been paying (for traffic delivery) since inception. It wants free, I get it, but someone has to pay for it," Jim Cicconi, AT&T Inc senior executive vice president for external and legislative affairs, said earlier this week.

Netflix streaming accounts for nearly one-third of North American web traffic during peak times, according to research by Sandvine Corp.

Netflix vice president for global public policy, Christopher Libertelli, this week said the company already invests money in delivering traffic to the Internet provider.

"We pay a lot of money to drop content at the doorstep of an ISP. All we're really asking is for the ISPs to swing the door open," Libertelli said at the Aspen Institute think tank. "This has become a new choke point."

These statements make clear as day that it's high time for a core to edge review of Internet policy. 

Netflix believes it is adding value to the network edge operators like AT&T by providing core content for their customers. AT&T and other edge providers however hold the exact opposite view -- that Netflix is instead imposing a cost burden to transport that core content to the homes and businesses they serve. Meanwhile, edge providers prevent core provider content from fully reaching all potential consumers with ultra risk averse policies that leave much of the last mile network infrastructure in their service territories only partially constructed.

Creating a Two-Speed Internet - NYTimes.com

Creating a Two-Speed Internet - NYTimes.com: Mr. Wheeler is seeking public comment on this option, but he is not in favor of it. Even though the appeals court has said the F.C.C. has authority to reclassify broadband, the agency has not done so because phone and cable companies, along with their mostly Republican supporters in Congress, strongly oppose it.

The incumbent telephone and cable companies want to do this because they want to keep alive the fantasy that the Internet is not a telecommunications service but rather a "broadband" or "information" service. It's the same old "fight the future" strategy they've employed for at least a decade.

In 2007, President Obama said one of the best things about the Internet “is that there is this incredible equality there” and charging “different rates to different websites” would destroy that principle. The proposal from Mr. Wheeler, an Obama appointee, would do just that.

Quite a damning indictment of the Obama administration's telecommunications policy -- or absence thereof.

U.S. Internet policy fails expectation of universal premise service

For nearly every American who has been alive since the end of World War II, the availability of telephone service at a home or business premise is taken for granted. Need a phone line or several lines? Contact the phone company, order them and they’ll get hooked up.

With wireline premises Internet service, it’s been a very different story. According to the U.S. Federal Communications Commission as of 2012, 19 million Americans couldn’t order an Internet connection because none was available for sale. Some of those Americans live in California’s Gold Country, located in the western foothills of the Sierra Nevada. And they can’t understand why if people in Sacramento -- or in many cases just down the road -- can get wireline Internet service, why can’t they? Plus they hear messages like this one that only five percent or fewer premises are unserved and have a hard time believing their home or business is one of them, particularly when nearby premises do have service.

It’s therefore unsurprising that “[m]any residents without access feel a sense of entitlement to broadband (Internet) service,” according to the Gold Country Broadband Consortium’s annual progress report. The consortium is among 14 regional consortia formed by the California Public Utilities Commission in 2011 to promote local Internet access and adoption of Internet-delivered services.

Unfortunately, neither California as the largest state nor the nation as a whole has a public policy to meet the expectation that Internet service in 2014 should be as ubiquitous as telephone service. Nor as the case with telephone service is there a workable subsidy program to ensure high cost areas are served.

The major causes of U.S. premise Internet service policy quagmire

U.S. telecommunications policy for premises Internet connectivity is in need of reassessment and revamping. It severely limits the nation’s ability to ensure all homes and businesses have fiber to the premise Internet connectivity capable of serving both current and future needs as bandwidth demand continues to grow exponentially.
 

Call it the Levin quagmire, named after former U.S. Federal Communications Commission official Blair Levin. In 2012, Levin predicted little change in the status quo, noting for most Americans over the near term, the best wireline network available to them will be the same one they have now. According to the FCC, for about 19 million Americans that’s dialup, state of the art technology in the early 1990s when Bill Clinton was starting his first term as president.

Summed up, these are the circumstances and policies that have produced the current quagmire:

• There is an insufficient business case for legacy incumbent telephone and cable companies to invest in building out their networks to serve all premises in their service areas or to upgrade existing infrastructure to fiber to the premise service. Nevertheless, these providers generally don’t avail themselves of federal and state subsidy programs aimed at capitalizing the cost of Internet infrastructure.
  

• Federal subsidy programs such as the Connect America Fund are only available to telephone companies and not cable companies that are becoming the dominant premises Internet service providers over telephone companies that are instead concentrating their capital investments on mobile wireless markets.

• Legacy incumbent telephone and cable providers view their service territories as proprietary franchises. Consequently, they oppose the award of subsidies to alternative providers and lobby for subsidy program eligibility rules inappropriately based on mobile wireless service and outmoded and changing standards of Internet service. They also lobby for state laws that bar local governments from building and operating fiber to the premise networks or make it impractical to do so.

Australians Without Broadband Call For Changes To NBN | Internet

Australians Without Broadband Call For Changes To NBN | Internet: Experts have blamed Telstra for failing to upgrade creaking infrastructure because the NBN will limit the return it can get on its investment. Meanwhile many of those without broadband face over three years on dialup or expensive and patchy wireless plans as they are not part of the early NBN rollout.

At least the Aussies can claim they have active construction underway to build fiber to the premise infrastructure -- albeit not fast enough for areas that must still rely on early 1990s era dial up over twisted copper pair and data capped mobile wireless service.  The United States does not: only the travesty of a "national broadband plan" that exists on paper only.  There, the wait to get off dial up may take even longer than for the folks down under unless American communities take the initiative to build their own community fiber networks.

Outdated telephone regulation matches dominant obsolete telco infrastructure

Coalition says broadband means new jobs: SPRINGFIELD — Investments in broadband technology created more than 13,000 jobs in Illinois in 2010 and 2011, according to a study funded by AT&T.

The study also reported that in 2012, Illinois had almost 20,000 jobs related to mobile applications.

The study was released Thursday by a new coalition of 12 Illinois groups representing business and job creation proponents, taxpayer advocates and communications companies.

The new coalition — the Illinois Partnership for the New Economy & Jobs — formed to urge Illinois to modernize its telecommunications law.

“Illinois’ law mandates investment in the 100-year-old technology of wired telephones to your home,” said coalition chair David Vite, who is also president of the Illinois Retail Merchants Association. “Those dollars would be better used for private investment in broadband networks that are currently creating new jobs.”

The stated implication of this study is fallacious.  It assumes but for government regulations requiring telcos to maintain obsolete copper cable wireline infrastructure to provide required telephone services, incumbent telcos would be able to replace it with fiber optic plant delivering Internet Protocol (IP)-based services.  The outdated laws and regulations appropriately remain on the books because the outdated publicly switched copper POTS infrastructure remains the dominant infrastructure in most of the nation, much of it incapable of delivering any IP-based services.

It's all about infrastructure, stupid

Council wants broadband minimum speeds redefined - News - The Charleston Gazette - West Virginia News and Sports -: State law now sets 200 kilobits per second as the minimum broadband speed, one of the slowest limits in the nation.

"It's nonsensical in this day and age," said Gale Given, West Virginia state government's chief technology officer.

Several council members suggested setting the minimum broadband speed at 4 megabits per second.

The Federal Communications Commission suggested that every U.S. household have a 4-megabit Internet download speed by 2020. The FCC determined that minimum speed would be sufficient to send and receive emails, download Web pages and use videoconferencing.

The entire debate and policymaking drill over "broadband speeds" is itself becoming obsolete the with growth in fiber to the premise infrastructure capable of 1 gigabyte and faster throughput.  To paraphrase the 1992 Clinton presidential campaign slogan, it's not about speed.  It's all about infrastructure, stupid.

Suggested amendments to proposed Community Connect Broadband Grant program rules

Too many American communities lack adequate Internet telecommunications infrastructure, a situation President Barack Obama deplored in his 2012 State of the Union speech.  Lots of these communities would like to build their own fiber to the premises networks that can connect every home and business and provide fast, future proof service while keeping local dollars in the community.

A major stumbling block facing these communities is financing the cost of retaining engineers and consultants to do the necessary initial design and business planning work before any fiber infrastructure can be deployed.  The U.S. Department of Agriculture's Rural Utilities Service (RUS) is in a position to help with its Community Connect Broadband Grant program by creating provisions for technical assistance grants to defray these costs.

RUS is currently soliciting comment on proposed rules governing the Community Connect Broadband Grant program.  As written, the proposed rules contain no provisions for technical assistance funding.   The proposed rules also fail to take into account the often spotty, hit or miss availability of wireline connectivity that exists in many of these poorly served areas. Communities have the opportunity to file comment in the rulemaking by January 15 and request these deficiencies be remedied.

Below is sample comment language communities can file with the RUS suggesting amendments to the proposed rules to allow for technical assistance grants.  This funding will help enable communities to move forward with these sorely needed projects to ensure their citizens and business owners have the 21st Century telecommunications infrastructure they need now and in the future.  Comments can be filed electronically by the January 15 deadline by clicking on the "Comment Now" button in the upper right hand part of the rulemaking proceeding page linked above.
------------------
Sec.  1739.11  Eligible Community Connect Competitive Grant Project.

    To be eligible for a Community Connect competitive grant, the 

Project must:

        (a) Serve a PFSA in which Broadband Service does not currently 

exist. served by a telephone central switching office or similar facility where at least one premise is not 

offered wireline, facilities-based broadband service;

    (b) Offer service at the Broadband Grant Speed to all residential 

and business customers within the PFSA;

    (c) Offer free service at the Broadband Grant Speed to all Critical 

Community Facilities located within the PFSA for at least 2 years 

starting from the time service becomes available to each Critical 

Community Facility; and

    (d) Provide a Community Center with at least two (2) Computer 

Access Points and wireless access at the Broadband Grant Speed, free of 

all charges to all users for at least 2 years.

Comment: This amendment is necessary because broadband service is highly granular even in rural areas where availability of facilities-based, wireline service is spotty and can vary within communities and from premise to premise. 

Sec.  1739.12  Eligible grant purposes.

    Grant funds may be used to finance the following:

    (a) The construction, acquisition, or leasing of facilities, 

including spectrum, land or buildings, used to deploy service at the 

Broadband Grant Speed to all residential and business customers located 

within the Proposed Funded Service Area and all participating Critical 

Community Facilities, including funding for up to ten Computer Access 

Points to be used in the Community Center. Leasing costs will only be 

covered through the advance of funds period included in the award 

documents;

    (b) The improvement, expansion, construction, or acquisition of a 

Community Center and provision of Computer Access Points. Grant funds 

for the Community Center will be limited to ten percent of the 

requested grant amount;

    (c) The cost of providing the necessary bandwidth for service free 

of charge to the Critical Community Facilities for 2 years.

 (d) As technical assistance for the retention of consultants and experts for economic research and engineering and business planning and community outreach.

(e) Applications for technical assistance pursuant to Subsection (d) shall not be subject to Section 1739.17.

Comment: This amendment is necessary in order to assist communities cover initial diligence costs and to aid in the preparation of applications for Rural Utilities Service broadband loan and grant programs.  Proper diligence in the early stage of a project will help ensure the financial viability of planned projects and repayment of loan proceeds.

Sec.  1739.14  Matching contributions.

    (a) At the time of closing of the award, the awardee must 

contribute or demonstrate available cash reserves in an account(s) of 

the awardee equal to at least 15% of the grant. Matching contributions 

must be used solely for the Project and shall not include any financial 

assistance from federal sources unless there is a federal statutory 

exception specifically authorizing the federal financial assistance to 

be considered as such. An applicant must provide evidence of its 

ability to comply with this requirement in its application.

    (b) At the end of every calendar quarter, the award must submit a 

schedule to RUS that identifies how the match contribution was used to 

support the project until the total contribution is expended.

(c) No match shall be required for technical assistance funding pursuant to Section 1739.12(d)

Comment: This amendment is necessary because raising matching funding for diligence and planning purposes is considerably more difficult than for construction costs of deploying a project that has undergone diligence demonstrating its likely technical and financial feasibility.  It will help increase the likelihood of more community-based projects being undertaken and expanding the availability of broadband services.

Sec.  1739.15  Completed application.

Add new subsection (m) as follows:    

(m) Applications for technical assistance funding pursuant to Section 1739.12(d) shall include only 

those items delineated at subsections (a) and (b)(1) through (3).

Mississippi map malarkey

A fundamental purpose of a map is to plan a route to an end point – a destination.  But when it comes to what’s called “broadband mapping,” the goal isn’t the destination.  In fact, this wasteful activity has resulted in a circular journey to nowhere, diverting precious resources that could otherwise be invested in building out Internet telecommunications infrastructure as this boondoggle out of Mississippi painfully illustrates. 

It’s a good thing the United States chose not to remedy the market failure that produced large gaps in electric power and telephone service availability in the early part of the 20^th Century by engaging in folly such as drawing up maps of existing electrical and telephone service and promoting electricity and telephone adoption where there was no service.  If that had been the policy, many areas of the nation might not have had power or telephone service until well into the 1950s and 1960s.

Telecom coops offer much needed alternative to build out U.S. Internet infrastructure

This Wall Street Journal article explores the Faustian bargain AT&T, America's largest wireline telecom provider, struck with the U.S. Federal Communications Commission to begin winding down its obsolete copper Publicly Switched Telephone Network (PSTN):

Mr. Stephenson himself has made it clear that AT&T would rather just sell off its regulated phone territories the way rival Verizon has done. But those sales haven't worked out swimmingly for the buyers, so now buyers can't be found, and neither would regulators likely bless further sales.  AT&T's plan, then, amounts to a compromise: AT&T will spend several billion dollars making undesirable investments if Washington will relieve it of the unsustainable regulatory burdens associated with the old copper voice network.

This is not an optimal solution for either AT&T's shareholders or for the many Americans who despite AT&T's expansion plans would remain disconnected from the Internet and the Voice Over Internet Protocol (VOIP) service it could provide to replace voice telephone service delivered over the nation's aging copper Publicly Switched Telephone Network (PSTN).  An alternative is clearly needed.

The good news is one exists as does its funding mechanism: cooperatives.  In the 1930s, the U.S. Department of Agriculture's Rural Utilities Service (RUS) made funding available to coops to build the needed infrastructure to deliver electric power and phone service.  The RUS remains in place today.  Given the problems investor-owned telcos like AT&T face deploying needed Internet infrastructure as shown in the WSJ story, the RUS should be given a higher profile and adequately funded to facilitate the much needed telecom coop alternative for the construction and operation of Internet infrastructure.

Big Bandwidth Can Unlock a New Competitive Advantage - Blair Levin - Voices - AllThingsD

Big Bandwidth Can Unlock a New Competitive Advantage - Blair Levin - Voices - AllThingsD

I haven't always seen eye to eye with Blair Levin, lead author of the Federal Communications Commission's National Broadband Plan issued in 2010 shortly before he joined the Aspen Institute think tank that year.  However, the above linked opinion article by Levin recently published in All Things D includes a number of statements with which I heartily agree.

First, Levin seems to be abandoning his prior stance that the private sector alone must invest in the massive, multi-billion dollar build of the necessary telecommunications infrastructure America needs to be competitive in an information based economy.  Levin now shares my view that incumbent, investor owned incumbent providers aren't in a position to do so because of their need to pay large dividends in the case of telcos and service high debt loads in the case of cable companies. "When it comes to wireline access to the Internet, instead of discussing upgrades, we are discussing bandwidth caps, tiers and rising prices. Instead of witnessing investment for growth, we are witnessing harvesting for dividends," Levin observes.
 
Levin also appears to have had an epiphany on what premises telecommunications service should be capable of delivering. Two years ago, Levin advocated for the subsidization of infrastructure than could deliver the FCC's minimum throughput standard of 4 Mbs down and 1 Mbs up to nearly all premises by 2020.  Levin now advocates what Andrew Cohill and others have dubbed "big broadband" (I prefer Levin's term, "big bandwidth"), perhaps not surprisingly since Levin also recently founded Gig U, an organization that Levin writes will build "gigabit hubs in nearly a dozen communities across the country, as well as a project to bring a 25X+ upgrade to hundreds of communities in rural America."  As to the latter project, this is the first I've heard of it and will be watching closely since it is these communities and not the university towns prioritized by Gig U that have the greatest need, being effectively disconnected from the Internet and relegated to substandard dialup and satellite connections.

I also found myself in strong agreement with Levin's call for a massive attitudinal shift away from the current mindset of bandwidth poverty fostered by incumbent providers who want to create the impression that more bandwidth cannot be created and therefore must be rationed and assessed a price premium.  Levin instead calls for a  “psychology of bandwidth abundance:” 

This psychology is what has fueled the uniquely American spirit of experimentation and innovation — from the first wave of European immigrants to the post-World War II America that helped rebuild Europe and Asia and created our modern economy and unleashed huge new industries from transportation to telecommunications. Unfortunately, however, the current environment suggests that we aren’t building that foundation. International studies on wireline bandwidth use differ, but all suggest we are mid-tier at best, and declining. 

Lest anyone doubt that the United States stands at a policy crossroads when it comes to upgrading its outdated telecommunications infrastructure, Levin notes that "[f]or the first time since American ingenuity birthed the commercial Internet, we do not have a single national wireline provider with plans to deploy a better network. For most Americans, five years from now, the best network available to them will be the same network they have today."  Levin's absolutely right on this point.

Finally, Levin notes this dismal state of affairs where accessing the Internet in 2017 will for many Americans be much like it was three decades before is not inevitable.  Levin is correct when he suggests that we must find ways to lower the cost of building needed infrastructure rather than shrugging and claiming it is simply out of reach:

We can regain leadership by improving the math for wireline investment through policy choices that have the effect of lowering capital or operating expenses or by raising the potential revenues or competitive threat to incumbents or new entrants. We have done this before. In fact, every new communications network deployment or upgrade has been preceded by a policy change that had one or more of these impacts. 

Why America needs lower cost, coop business models to complete Internet infrastructure

The excerpt below from Timothy B. Lee's discussion in the current issue of National Affairs of what ails America's regulation of Internet infrastructure states a strong case for alternative, lower cost business models such as telecommunications cooperatives to bring fiber connections to nearly all premises and to keep cable companies from gaining near total market dominance:

FiOS is Verizon's attempt to solve this problem by replacing its slow telephone cables with fiber-optic connections capable of offering speed that can compete with Comcast's. But in 2010, Verizon announced that it was winding down its FiOS installation efforts. Verizon plans for the network to reach around 18 million households, but not in some major metropolitan areas, including a few (like Boston) at the heart of its service area. News reports cited the high costs of the project as a reason why it was not being extended to all homes in Verizon's territory. Meanwhile, AT&T's project to partially replace its copper network with fiber, "U-Verse," is also being hampered by high costs. U-Verse service is faster than a traditional DSL line, but it is significantly slower than Verizon's and Comcast's high-speed networks, and it will not reach all households in AT&T's service territory. This might explain why, in the third quarter of 2011, Comcast added more than twice as many subscribers as did the seven largest telephone incumbents combined.

Bell wireline monopoly stymies wireless Internet

The physics of radio spectrum place a natural limit on wireless Internet capacity. That limit is exacerbated by the wireline telco monopolies who restrict wireline backhaul connections to cell sites, writes Level 3 Communications CEO James Q. Crowe in this Forbes article.

Crowe details uncompetitive market practices aimed at creating artificial market scarcity of wireless backhaul and calls for action from Washington to break up the big telcos' wireline cartel.

Susan Crawford on the state of U.S. Internet access

Susan Crawford has penned an excellent overview of the current state of Internet access in the United States in The New York Times, The New Digital Divide.

As the title of her piece suggests, Internet access is highly fragmented. Cable companies provide limited wired access in discrete, monopolistic markets in densely populated metro areas for those able to afford the $100 monthly cost (when bundled with voice phone and video) that these cablecos can increase at will absent the check and balance of market forces and rate regulation.

Meanwhile, lower income Americans who can't afford both wired and wireless access rely on wireless smartphones for Internet connectivity that costs half as much as bundled wired access. So must those who can afford wired access but can't get it at any price because of incomplete build out of wireline infrastructure. But it's not full access and comes with major disadvantages versus wired premises service. Crawford explains:

The problem is that smartphone access is not a substitute for wired. The vast majority of jobs require online applications, but it is hard to type up a résumé on a hand-held device; it is hard to get a college degree from a remote location using wireless. Few people would start a business using only a wireless connection.

It is not just inconvenient — many of these activities are physically impossible via a wireless connection. By their nature, the airwaves suffer from severe capacity limitations: the same five gigabytes of data that might take nine minutes to download over a high-speed cable connection would take an hour and 15 minutes to travel over a wireless connection.

Even if a smartphone had the technical potential to compete with wired, users would still be hampered by the monthly data caps put in place by AT&T and Verizon, by far the largest wireless carriers in America.

FCC issues proposed order creating Connect America Fund

The U.S. Federal Communications Commission has released its proposed order revamping the Universal Service Fund (USF) that has for decades subsidized plain old telephone service (POTS) in high cost areas. The USF will now be directed to support Internet connectivity as the Connect America Fund (CAF). The CAF will instead subsidize telecommunications infrastructure to serve what the FCC estimates to be 18 million Americans who involuntarily remain off the Internet “grid” because it costs too much to connect them.

Whether the proposed order would achieve that and do so in a timely manner is an open question. The executive summary of the rather inscrutable 759-page document states that “[w]hile continuing to require that all eligible telecommunications carriers (ETCs) offer voice services, we now require that they also offer broadband services.” But a close reading of the order shows no indication the FCC will expand the telcos’ existing common carrier obligation to provide voice service to all (and not just some) premises in their service areas to encompass Internet. For example, paragraph 1090 on page 398 of the proposed order:

Under section 214 of the Act (the federal Communications Act of 1996), the states possess primary authority for designating ETCs and setting their “service area[s],” although the Commission may step in to the extent state commissions lack jurisdiction. Section 214(e)(1) provides that once designated, ETCs “shall be eligible to receive universal service support in accordance with section 254 and shall, throughout the service area for which the designation is received . . . offer the services that are supported by Federal universal service support mechanisms under section 254(c).” Although we require providers to offer broadband service as a condition of universal service support, under the legal framework we adopt today, the “services” referred to in section 254(e)(1) means voice service, either landline or mobile. (Emphasis added).

That sounds like POTS and not Internet. In addition, there is no reference in the proposed order to Title II Section 214(e)(3) of the Communications Act of 1996 that empowers the FCC to "determine which common carrier or carriers are best able to provide such service to the requesting unserved community or portion thereof and shall order such carrier or carriers to provide such service for that unserved community or portion thereof." So it appears that telcos could continue to not serve some areas even while accepting CAF subsidies to serve others -- thereby perpetuating the existing problem of broadband black holes.

It’s also unclear from the proposed order how unserved areas in states where the incumbent telco has relinquished its carrier of last resort status would be able to benefit since these carriers would appear to be ineligible for CAF subsidies. Or whether telcos, even if eligible for CAF subsidies, would accept them. In California, for example, telcos have generally shunned generous subsidies available through the California Public Utilities Commission to offset the cost of constructing infrastructure to provide Internet connections to premises in unserved and underserved areas of the state.

Finally and perhaps most importantly, given that many people have and continue to “cut the cord” to landline voice service, will there be enough money to be had from phone bill surcharges that have historically funded the USF to sustain the CAF?