To speed advanced telecommunications infrastructure deployment, Congress should tweak infrastructure bill along lines of American Rescue Plan Act

When Congress returns from the year end holiday break next year, it should tweak the Infrastructure Investment and Jobs Act (IIJA) recently signed into law by President Biden as one of its first orders of business. As enacted, the statute’s provisions appropriating $42 billion in state grants for advanced telecommunications infrastructure set the stage for conflict and potential litigation that could add more years of delay to the already long overdue modernization of the nation’s telecommunications infrastructure.

Doug Dawson published a thought provoking blog post earlier this week laying out some of the potential pitfalls. The law needs immediate attention since the National Telecommunications and Information Administration (NTIA) is mandated by the IIJA to set up shop to disburse the funding during the first several months of 2022 as the ‘‘Broadband Equity, Access, and Deployment Program.”

The pitfalls stem from the IIJA’s retention of a throughput versus infrastructure standard and its reliance on the Federal Communications Commission’s “broadband map” (currently being updated) detailing what throughput is available for a given location. The map is a critical measure because funding eligibility is primarily targeted for projects where at least 80 percent of premises are “unserved,” defined by the bill as those not having any providers offering service with throughput of at least 25 Mbps down and 3 Mbps up. The FCC mapping process has been fraught with controversy over its accuracy since the FCC’s National Broadband Map debuted more than a decade ago. Tied to this is distrust of incumbent legacy telephone companies suspected of overstating available throughput in order to disqualify potential subsidization of construction by other entities in their nominal service areas.

As Dawson notes, some states could rely on their own map data, setting states against the federal government’s maps. These states might also prefer to award IIJA funding to public sector and nonprofit owned fiber to the premise infrastructure after years of little infrastructure modernization by incumbents despite state subsidies and persistent neighborhood redlining that limits access and affordability. These states could also opt to cover the 25 percent cost match required by the IIJA with their own funds. States would be on solid public policy ground since the IIJA funding does not require incumbent telephone companies to offer advanced telecommunications service to any customer reasonably requesting it or at affordable rates, leaving longstanding gaps.

That could set the stage for lawsuits by investor-owned telephone, cable and fixed wireless incumbents contending states are unfairly disfavoring them in contravention of the IIJA’s provisions. They would likely exercise their right to challenge proposed build areas as allowed by the IIJA, fly specking them and arguing they are not “unserved” areas or that states are directing funding to “underserved” areas (where per the IIJA service isn’t available to 80 percent of locations at 100/20 Mbps) before ensuring there are no more “unserved” areas as required by the legislation.

To avoid these potential risks that could delay badly needed advanced telecommunications infrastructure, Congress should amend the IIJA’s advanced telecommunications infrastructure grant provisions along the lines of the American Rescue Plan Act (ARPA) enacted earlier this year. That measure appropriates $10 billion to state, local and tribal governments for capital projects including advanced telecommunications infrastructure.

The ARPA is more favorable to a fiber to the premises (FTTP) infrastructure modernization standard by specifying projects provide symmetrical throughput of 100/100 Mbps or be scalable to it. The ARPA also recognizes the need for rapid deployment by affording “significant discretion” to state, local and tribal governments to identify eligible projects without having to rely on federal “broadband maps” and not including a process for incumbents to challenge proposed projects as “overbuilding.”

Cable giants, electric co-ops battle over federal broadband dollars - Mississippi Today

But Mayo Flynt, president of AT&T Mississippi, told lawmakers: “We do think this is a job for the private sector and not the government sector to do … Scale is your friend, you’re going to get more return for your dollar, and this is a scale business … We believe that a competitive process or (requests for proposals) is going to help you get the best bang for your buck. Competition is a good thing. We are in the game and are competing.”

In 2019, the Mississippi Legislature passed a law allowing electric cooperatives to provide internet service — an effort to expand broadband access in a poor, rural state where an estimated 40% of the state lacked access. The effort has been likened to providing electricity to rural Mississippi in the 1930s. Proponents said large cable and telecom companies were failing to expand service into rural areas because it wasn’t profitable enough. But cable and telecom providers say they have spent millions in private funds expanding internet service in Mississippi, and that they shouldn’t be cut out of government funding for expansion.

 Source: Cable giants, Mississippi electric cooperatives battle over federal broadband dollars 

AT&T's Flynt is right. Telecommunications infrastructure like most infrastructure due to the high cost of constructing and maintaining it benefits from economies of scale. But that's not an argument against public ownership for which the American Rescue Plan Act targets funding. Rather, it helps make the case that the federal and state government should take a regional approach to ensuring fiber optic connections reach every home, school and small business to attain optimal economies of scale and purchasing power. Especially given constraints in the supply of materials and labor that can add further delay to badly overdue deployments.

There are roles for legacy telephone and cable companies in this important task. They have experience and expertise in designing, building, operating and maintaining telecommunications infrastructure. Since their business model constraints do not allow them to provide universal fiber to the premises service and instead build in areas where they can garner the most rapid return on investment, these functions rather than vertically integrated ownership of infrastructure and services is the best public policy here. These players can get some of the federal dollars but should do so as contractors on regional open access FTTP projects undertaken by the public sector and consumer utility cooperatives.

FCC set to move into key role on universal advanced telecommunications service

Within one month following the enactment of the Infrastructure Investment and Jobs Act President Biden will sign into law next week, the Federal Communications Commission must commence a proceeding to determine how the FCC should achieve universal advanced telecommunications service. The measure mandates the FCC report to Congress by next August options for “improving its effectiveness in achieving the universal service goals” taking into account the bill and other legislation addressing the goal of universal service. Universal service was attained for voice telephone service in the previous century. The report gives the FCC authority to make “recommendations for Congress on further actions the Commission and Congress could take to improve the ability of the Commission to achieve” universal service.

Notably, the infrastructure bill emphasizes the FCC report “may not in any way reduce the congressional mandate to achieve the universal service goals.” But it gives the FCC an opportunity to weigh in as to whether it “believes such an expansion is in the public interest.”

The infrastructure bill’s enactment comes as the administration looks to put its mark on the FCC by nominating FCC member Jessica Rosenworcel to serve as chair and Gigi Sohn as a member of the panel. In an executive order issued in July, President Biden called on the FCC to reinstate Obama administration regulations repealed during the Trump administration that would mandate universal service by classifying IP delivered services as common carrier telecommunications under Title II of the Communications Act of 1934.