FCC RDOF subsidy rules: USTelecom has no legitimate complaint

USTelecom on RDOF Impact: When the ILEC is No Longer the Carrier of Last Resort - Telecompetitor: The upshot is that while the CAF II auction diverted a relatively small portion of subsidies that would normally have gone to the price cap carriers to other entities, the RDOF has the potential to trigger a more dramatic shift away from the price cap carriers. As the report authors, note, “[c]ompletely shutting off access to federal universal service support to an incumbent in favor of a competitor is a new frontier in the evolution of the support mechanism.” As subsidies for price cap territories go to companies other than the incumbents, “the ILEC should be relieved of all federal and state obligations to provide service in such areas,” the authors argue. (Emphasis added)

USTelecom has nothing to complain about here. Incumbent Local Exchange Carriers have no obligation to provide advanced telecom service (ATS) to all premises in their service territories -- only voice telephone service. That's thanks to the U.S. Federal Communications Commission's 2018 repeal of the previous Obama era FCC's Open Internet rulemaking in 2015 classifying ATS as a telecommunications utility under Title II of the federal Communications Act and thus subject to universal service and non-discrimination mandates. The current FCC instead opted to classify ATS as an information service under Title I of the statute, turning the calendar back to 1990 and the days of CompuServe and AOL.

Push back on public option fiber based on fallacious argument utility infrastructure a competitive market

North Carolina considers loosening municipal broadband regulations: In May, Gov. Roy Cooper announced $9.8 million for broadband expansion to rural areas as part of a $35 million initiative to improve internet access across the entire state. Municipal broadband, however, has a troubled history in North Carolina and beyond.The bill cleared the North Carolina House State and Local Government Committee on Wednesday and will move to the chamber’s Finance Committee for a second vote, but industry officials are opposed. Spectrum’s senior director of government relations, Brian Gregory, said the increased competition from public entities would backfire.

“It’s especially troubling for us because our employees and our companies are going to be taxed to have competition against us, and that competition on top of that is also our regulator,” Gregory told WRAL, the NBC affiliate in Raleigh.

The thing is, advanced telecom infrastructure is NOT a competitive market. In fact, it's arguably a failed market because so many people who want better landline connections to their homes and small businesses and are willing to pay for them aren't able to buy them. Investor owned telephone and cable companies must also deal with inherent limitations on what they can invest in modernizing their infrastructures to fiber to the premise. Investors naturally push back when it comes to sacrificing profits and dividends to capital expenditures.

U.S. needs universal FTTP telecom infrastructure as public utility standard

The Benton Foundation has pulled together policy positions of several Democratic presidential candidates in a blog post, 2020 Candidates Offer Plans to Extend the Reach of Broadband. Of these candidates, only Elizabeth Warren offers a plan for universal fiber to the premise (FTTP) advanced telecommunications infrastructure as a public utility. It’s a position recognizing:

1. It’s what’s needed to rapidly modernize the nation’s legacy metal cable built for the pre-digital era of telephone and cable TV service to provide the capacity to handle rapidly growing bandwidth demand;
2. There isn’t and will likely never be a viable business case for private sector investment alone to achieve this in the foreseeable future due to the high labor costs of building utility infrastructure, and;
3. There’s an inherent conflict of interest between private investment and public interests when it comes to modernizing the nation’s telecommunications infrastructure. The public interest is clearly for modernizing to FTTP to enable economic activity, education, medical care and civic engagement. The private investor interest priority isn’t necessarily modernization of telecommunications infrastructure and its positive effects but instead to offer premium, higher margin service offerings based on throughput speed tiers. Warren’s proposal includes throughput speed (symmetric 100Mbs) but only as basic service quality standard.

The goal of universal FTTP as a public utility properly establishes an infrastructure-based standard for the nation considering only a small portion of the country has FTTP connections. That’s far behind where the United States should be in 2019 given that it should have achieved near universal FTTP at least a decade ago.  It’s the right goal for where the nation is now. Not a geographic or bandwidth-based goal of extending “rural broadband” or “improving broadband maps.” Broadband and specifically the lack thereof isn't a solution but rather the primary symptom of the lack of FTTP infrastructure and the consequent weaknesses of existing metallic infrastructure. If it reached nearly every American doorstep, "broadband" speeds and maps wouldn't even be part of the lexicon.