An Analysis of the FCC's National Broadband Plan
On March 16, 2010, the Federal Communications Commission (FCC) presented to Congress its long-anticipated National Broadband Plan, as mandated by the American Recovery and Reinvestment Act of 2009 (the “Recovery Act”). Thirteen months in the making and weighing in at nearly 400 pages, “Connecting America: The National Broadband Plan” (the “Plan”) has occupied a disproportionate share of the FCC’s time and energy for the last year and, given the breadth and sheer quantity of its analysis and proposals, it will continue to be the single greatest focus of the agency for years to come. For all providers of wired and wireless communications services in the United States, its findings, recommendations and myriad implementing proceedings will be of tremendous consequence.
This executive summary provides a short overview of the highlights of the Plan and next steps, and provides links to more detailed analysis of each primary issue for communications providers.
Background
Section 6001 of the Recovery Act, signed into law by President Obama on Feb. 17, 2009, less than a month after his inauguration, mandated the dispersal of $7.2 billion through grant and loan programs to expand broadband deployment to, and adoption by, unserved and underserved areas and vulnerable populations. Those programs—the Broadband Technology Opportunities Program (BTOP) administered by the Department of Commerce and the Broadband Initiatives Program (BIP) administered by the Department of Agriculture—are underway, and by law, all of these grants must be awarded by September 30, and the projects completed within three years thereafter.
But Subsection 6001(k) of the Recovery Act also directed the FCC to submit to Congress a National Broadband Plan for the longer term, to pick up where these broadband deployment and other short-term projects leave off “to ensure that all people of the United States have access to broadband capability and [to] establish benchmarks for meeting that goal.”
Congress ordered the FCC to include (1) “analysis of the most effective and efficient mechanisms for ensuring broadband access” by all Americans, (2) “a detailed strategy for achieving affordability of such service and maximum utilization of broadband infrastructure” by the public, (3) “an evaluation of the status of deployment of broadband service, including progress of projects supported by the [BTOP and BIP] grants,” and (4) “a plan for use of broadband infrastructure and services in advancing consumer welfare, civic participation, public safety and homeland security, community development, health care delivery, energy independence and efficiency, education, worker training, private sector investment, entrepreneurial activity, job creation and economic growth, and other national purposes.”
Analysis of the Plan
The Plan purports to fulfill these directives and indeed aspires “to ensure that the entire broadband ecosystem—networks, devices, content, and applications—is healthy” through recommendations to itself, the executive branch, Congress and state and local governments, including these goals:
- Connect 100 million households to affordable 100-megabits-per-second service, building the world's largest market of high-speed broadband users and ensuring that new jobs and businesses are created in America.
- Provide affordable access in every American community to ultra-high-speed broadband of at least 1 gigabit per second at anchor institutions such as schools, hospitals and military installations, so that America is hosting the experiments that produce tomorrow's ideas and industries.
- Ensure that the United States is leading the world in mobile innovation by making 500 megahertz of spectrum newly available for licensed and unlicensed use.
- Move broadband adoption rates from roughly 65 percent to more than 90 percent and make sure that every child in America is digitally literate by the time he or she leaves high school.
- Bring affordable broadband to rural communities, schools, libraries and vulnerable populations by transitioning existing Universal Service Fund support from yesterday’s analog technologies to tomorrow’s digital infrastructure.
- Promote competition across the broadband ecosystem by ensuring greater transparency, removing barriers to entry and conducting market-based analysis with quality data on price, speed and availability.
- Enhance the safety of the American people by providing every first responder with access to a nationwide, wireless interoperable public safety network.
Given these wide-ranging aspirations, a great deal of the Plan’s text describes the potential benefits of universal availability and use of broadband, but many of the most important details on how the FCC would achieve these goals are left to future FCC proceedings or other government authorities. Thus, some of these proposals may never become reality. One suggested change that may or may not become “reality” concerns the legal framework for adopting the Plan. The FCC recounts suggestions from some advocates that it change broadband service classification from its current designation as an information service (a classification upheld by the Supreme Court) to a common carrier telecommunications service regulated under Title II, with possible forbearance. While this may dovetail with the Plan’s mention of requiring broadband service providers to support generic “gateway” devices for Internet access, the debate over reclassifying broadband has been covered in existing proceedings, including the Commission's Rulemaking on Net Neutrality, as discussed in our advisory dated October 22, 2009. Many commenters who filed in the National Broadband Plan proceeding, and apparently at least two Commissioners, believe such a reclassification would create an impediment to adoption, use and deployment of broadband technology and infrastructure.
The Commission promises to quickly establish a timetable to conduct proceedings on matters within its authority over the coming 12 to 18 months. The Commission staff estimates that the Plan will result in perhaps 40 different FCC proceedings during that period. The FCC will be releasing a series of notices to launch these proceedings, and Davis Wright Tremaine will participate in them on behalf of our clients.
Our analysis of the Plan emphasizes concrete proposals and practical implications for communications service providers and other entities directly affected by the more definite elements of the Plan. The summary of specific issues, and links to more detailed analysis, follow below:
The Plan proposes to increase and enhance broadband deployment across the United States through a combination of policy changes, incentives to private industry to invest in broadband deployment wherever it can be profitable, and direct public investment to serve areas where no commercially viable business case can be made and to serve other public needs such as health care, education and public safety. [MORE]
Overhauling High-Cost Universal Service
The FCC proposes to replace the high-cost subsidy portion of the Universal Service Fund (USF) with two new funds supporting broadband and mobile broadband in certain unserved areas of the country, while keeping total subsidies close to the current level of funding. Most legacy support would not be phased out until the second stage of a transition from 2012 to 2016, meaning that disbursements for broadband subsidies would not begin until then. The Plan lacks detail on potential reform of the USF contribution system, leaving that critical issue to future proceedings. [MORE]
The Commission proposes to reform, and then ultimately eliminate, the existing intercarrier compensation (ICC) regime, which it views as an impediment to investment in broadband infrastructure. [MORE]
Mobile Broadband and Spectrum Initiatives
The Plan recognizes that no area of the broadband ecosystem holds more promise for transformational innovation than mobile services. In order to accommodate this significant growth and develop mobile broadband services, the Plan recommends:
- Increasing spectrum availability and modifying spectrum policy;
- Reducing obstacles that may slow facility deployment or increase investment costs;
- Increasing access to mobile broadband for all Americans; and
- Improving mobile communications for public safety.
There are a number of other critical issues in the Plan for wireless stakeholders, including how wireless broadband service is technically defined and disclosed to consumers and whether universal service reforms will level the playing field for wireless ETCs. [MORE]
Infrastructure Deployment: Utility Poles, Conduit and Rights of Way
The Plan recommends a number of actions to promote broadband deployment and adoption for wired and wireless networks, including lowering pole access and rental costs and establishing more timely access to poles, conduits and public rights of ways. Recommendations include:
- Lowering the telecommunications pole rent formula close to the cable television pole formula rate
- Creating timelines to govern every step of the pole attachment process
- Lowering right-of-way fees to cost-based level
- Creating a federal, state, Tribal and local task force to identify right-of-way best practices to speed deployment
The Plan recommends that all MVPDs install (still undefined) gateway devices or functional equivalents in all new subscriber homes and in all home requiring replacement set-tops by Dec. 31, 2012. It appears that the Commission will first move forward with a Notice of Inquiry to collect more information, rather than launch a rulemaking proceeding as gateway advocates had urged. However, the authors’ vision of a gateway device is taken directly from some of the more extreme positions of advocates who seek to restructure cable architecture and business, such as stripping out any MVPD functionality other than delivery of standardized video and service feeds, with no recognition of the complexities involved in interactive cable services. The Broadband Plan makes a second recommendation targeted exclusively at cable operators. While declaring the CableCARD to be a failure, it proposes that the FCC adopt rules by the fall of 2010 requiring cable operators to redesign switched digital technology (SDV), restructure the prices of set-tops and bundled cable packages, change the CableCARD installation process, and possibly limit device certification to preventing harm to the network. [MORE]
The Plan adopts a relatively balanced approach to online data collection, advanced advertising and consumer privacy, recognizing that online data collection and digital profiling can enhance consumer value in gaining access to more relevant advertising and subsidized or free services. It calls for “transparency” regarding what broadband providers and purveyors of online goods/services do or wish to do with consumers’ personal data, “informed consent” for such uses, and continuing consumer “control” over the uses (particularly the disclosure) of such data, as well as enforcement mechanisms. But it does not make any explicit call for “opt-in” consents for the use of personal data. It recommends that Congress, the Federal Trade Commission and the FCC collaborate to clarify the relative control users have over their online profiles and personal data, and for the development of private sector companies that can help consumers manage their personal data, and that more resources be devoted to combating identity theft. [MORE]
The Plan makes a number of recommendations to promote and strengthen cybersecurity and to protect critical broadband infrastructure, in an effort to increase consumer confidence, trust and broadband adoption. The Plan first recommends an active federal role in creating public-private cybersecurity partnerships, development of machine-readable repositories with actionable real-time information on cybersecurity threats, expansion of cybersecurity educational and training programs, coordinated cybersecurity assistance to help foreign countries develop expertise in this area, and increased Federal Communications Commission (FCC) participation in domestic and international fora addressing cybersecurity. With respect to other FCC-specific steps, the Plan sets out for the FCC several key tasks to foster cybersecurity, including:
- Working with the executive branch to issue within 180 days of the Plan a cybersecurity “roadmap” identifying the five most critical cybersecurity threats and establishing a two-year plan for addressing the threats
- Working with Internet service providers (ISPs) to build robust cybersecurity protection and defenses into networks used by businesses and individuals who lack access to cybersecurity resources
- Initiating FCC proceedings to (a) extend FCC Part 4 outage reporting rules to broadband ISPs and interconnected voice over Internet protocol (VoIP) providers, (b) inquire into the resilience, reliability and preparedness of broadband networks, and (c) explore whether and how to encourage voluntary efforts by broadband providers to improve cybersecurity
- Establishing a IP network cybersecurity information reporting system
- Jointly creating with the National Communications System (NCS) priority network access and routing for broadband communications to protect time-sensitive, safety-of-life information needed by public safety providers
- Funding a wireless test bed for evaluating network security
The Plan proposes to modify the Universal Service Schools & Libraries (E-rate) program, which was created in 1996 to subsidize telecommunications, Internet access and related services provided to K-12 schools and libraries. The FCC seeks to expand the range and permitted uses of subsidized E-rate services, such as: permitting schools to allow public use of services, supporting off-campus wireless access by students, expanding funding of on-premise equipment, and increasing flexibility to use lower-cost solutions including equipment needed to light dark fiber.
The Plan also seeks to encourage innovation by funding “best ideas” projects that help to integrate broadband services into education. Of particular interest to current E-rate participants are proposals to streamline the application process for smaller projects, fund “Priority 1” services on a multi-year basis, and increase the annual $2.25 billion cap on E-rate funding by indexing it to inflation. Finally, the Plan seeks to expand federal funding—whether through the E-rate program or another federal mechanism—to community colleges, as well as settle eligibility issues for tribal libraries. [MORE]
The Plan proposes to increase overall adoption levels from 65 percent to 90 percent over the next 10 years by focusing in on removing barriers to adoption affecting the 35 percent (representing 80 million adults) of nonadopters who are more likely than not to be: low income, African American or Hispanic, senior citizens, from a rural household, or disabled. The primary barriers to adoption experienced by these citizens are: 1) cost/affordability, 2) digital literacy, and 3) relevance, with issues for people with disabilities cutting across and beyond all three barriers. In addition to making recommendations as to how to overcome the top three barriers to adoption, the Plan also addresses measurement, best practices and coordination of Tribal, state, and local initiatives, all in an effort to increase broadband adoption. [MORE]
Broadband Access for Persons with Disabilities
The Plan includes a series of recommendations to improve and enhance access to broadband services by persons with disabilities. The Plan recommends that all branches of the federal government update existing laws to apply to Internet protocol equipment and services, and apply current law to require accessibility to certain commercial Web sites. The Plan further recommends that both the Executive Branch and the FCC establish working groups to ensure compliance with applicable laws and to encourage and fund development of new and efficient technologies to make broadband more accessible to the disabled. [MORE]
The deployment of Smart Grid technology is vitally important to America’s energy future, but limitations in existing commercial and private electric utility networks threaten to delay Smart Grid implementation. The Plan proposes to remedy this situation by recommending that commercial broadband networks be enhanced for greater reliability and that electric utilities be permitted and encouraged to use these networks, or to use the proposed public safety network or construct their own broadband networks where appropriate, to deploy Smart Grid applications. The Plan further recommends that States (or Congress in the absence of state action within 18 months) should require electric utilities to provide consumers with access to, and control of, their own energy use information. The Plan also proposes that the FCC start a proceeding to improve the energy efficiency and environmental impact of the communications industry. [MORE]
Consumer Disclosure Requirements
The Plan recommends the standardization of technical measurements of broadband performance (e.g., actual speeds), and the establishment of specific performance and service contract disclosure requirements by broadband providers. With regard to mobile broadband, the Plan acknowledges that there are unique disclosure issues relating to speed, performance, coverage and reliability and will work with the wireless industry toward appropriate performance standards and consumer disclosures. The Plan also proposes that the FCC investigate improving transparency relating to broadband performance standards in multiple dwelling units (MDUs) and commercial buildings. [MORE]
Broadband Availability in Tribal Communities
The Plan points to a significant lack of broadband facilities serving Tribal lands as well as an astonishingly low broadband usage rate by Tribal land residents. To rectify this deficiency, the Plan proposes to prioritize Tribal needs and Tribal government input in its efforts to reform USF, requires the FCC to consider Tribal lands’ unique spectrum needs in its implementation of the Plan’s proposal to reform spectrum policy, recommends that Congress establish a new Tribal Broadband Fund to provide capital for broadband deployment and adoption, and seeks to improve coordination and consultation with Tribes on a government to government basis on broadband related issues, including through the recommended creation of an Executive level initiative, a new FCC Office of Tribal Affairs, an FCC task force devoted to consideration of Tribal concerns in all broadband proceedings, as well as a joint right-of-way task force comprised of State, Tribal and local policymakers, and expanded opportunities for Tribal member participation in FCC training programs. [MORE]
The Plan follows the recent overhaul of the Federal Health IT Strategic Plan in the Health Information Technology for Economic and Clinical Health Act (HITECH) Act. The HITECH Act was part of the American Recovery and Reinvestment Act of 2009, the stimulus law adopted in February of last year. Recommendations in the Plan include new payment incentives, the removal of regulatory barriers to technology use, and ways to make health information more easily available for research and outcome evaluation. [MORE]
Download Davis Wright Tremaine's complete analysis of the National Broadband Plan (PDF)