As the Federal Communications Commission prepares $20.4 billion aimed at fixing broadband access challenges, stakeholders have voiced both optimism and concern about how the funds are being distributed.
In the wake of the Federal Communications Commission's recent approval of the $20.4 billion Rural Digital Opportunity Fund, stakeholder reactions to the broadband support program's disbursal rules have been mixed.
The new FCC money will be divvied up in two phases, with the first distributing the majority of the funds, $16 billion, to Census blocks where data shows no service is available. What some stakeholders take issue with, however, is that the FCC is using Form 477 data, which has driven its funding in the past but has also been widely criticized. A top point of contention is that within this data, if a Census block has a single household with high-speed Internet, the entire area is counted as served.
This is an issue that drew mixed responses from FCC commissioners involved with the initial ruling.
FCC Commissioner Michael O’Rielly supported the decision in an official statement, downplaying concern.
“[B]y limiting Phase I eligibility to those Census blocks that have no broadband whatsoever and targeting those consumers truly deserving of FCC assistance, our action should not in any way trigger or exacerbate the rightful concerns raised over our broadband mapping procedures,” O’Rielly wrote.
Two other FCC commissioners, Jessica Rosenworcel and Geoffrey Starks, were less enthusiastic.
"This effort has been pushed out so fast I fear we are only starting to understand what is not workable in this framework," Rosenworcel said in her statement. "We are making so much up as we go along."
Rebecca Dilg, rural community and outreach manager for the Utah Governor’s Office of Economic Development, is aware of related situations in Utah where stakeholders wanted to pursue FCC funding. In one case involving a Census block that covered dozens of square miles, developers couldn’t go after any money because of a single served household.
“I couldn’t help but be concerned [about the Census block rule] and wanting to look at it a little more,” Dilg said. “You look at Census blocks in Utah or the entire West compared to the East. I mean, it’s completely different. We have this wide expanse.”
Industry analyst Craig Settles said using Form 477 data to determine eligibility allows large broadband providers to say, “We’re doing a great job because we said so,” which leaves behind people in rural areas who need better Internet service.
“This whole thing is a sham,” Settles said. “Having the 477 data is a joke, because you’re basically self-dealing to the incumbents because they influence what the information is.”
Settles added there should be more accountability on how FCC broadband money is used after it’s awarded. Billions of FCC dollars have been given out for many years. “And what do we have to show for it? I would contend that we have little to show for it,” Settles said.
A 2018 study by the Institute for Local Self-Reliance indicates that Form 477 reporting enables “de facto monopoly providers” to “overstate their coverage and territory to hide the unreliable and slow nature of their service in many communities.” The study also states that the extensive instructions for Form 477 discourage smaller providers with fewer resources from completing the form.
Even though Microsoft has previously cited multiple limitations with Form 477 data, the company supports the Rural Digital Opportunity Fund and is optimistic that the FCC will continue its effort to reform broadband mapping, said a representative from Microsoft, in an email to Government Technology. Indeed, for the fund’s second phase, which will distribute a smaller amount of $4.4 billion, the FCC promises to use “granular, precise broadband mapping data.”
Other rules for the Rural Digital Opportunity Fund may raise concerns among smaller providers as well. The new program will “prioritize bidders committing to provide fast service with low latency,” which deviates from previous FCC funds that prioritized efficiency. Claude Aiken, president of the Wireless Internet Service Providers Association, said higher-speed networks take much more capital to deploy, which could make smaller providers bow out of of an already-complicated auction process.
“If they look at it and see only gigabit speeds are going to win out, that might keep them out of the auction altogether and result in even less competition for the subsidy money,” Aiken said.
Aiken, however, was more optimistic about a line of credit requirement that would potentially keep smaller providers from competing. He said although the official rules document hasn’t been released yet, he believes the FCC has moved in a positive direction on this particular issue based on what he heard from the last meeting about the fund.
One difference from previous FCC broadband funds is a provision that allows electric cooperatives to participate. Brandon Presley, the northern district commissioner for the Mississippi Public Service Commission, said this rule is a “monumental step in the right direction.” In 2019, Mississippi passed the Broadband Enabling Act, which granted electric co-ops in the state the ability to provide broadband to their members. In less than a year since the bill’s passage, eight co-ops in the state have announced plans to bring high-speed Internet to their customers.
“We have a proud history of serving our rural communities [through electric coops] … I applaud the FCC for it [the new co-op rule],” Presley said.
Presley would like the FCC to abandon the practice of using Form 477 data to identify eligible areas, but he said “that’s a part of the rule that we’ll move on and live under, I guess.”
The FCC also initially stated that neither Alaska nor New York would be able to receive money from the new fund due to established FFC-related broadband programs in those states. Various Congress members from New York complained, leading the FCC to change its position on New York. Meanwhile, Alaska doesn’t have an issue with being excluded from the new program, as it already benefits from three FCC funds.
“The FCC is legitimately working with us trying to solve the problem,” said Keith Comstock, development executive in the Alaska Department of Commerce, Community, and Economic Development. “Whether or not the three plans currently available will get us to 100 percent or not, that’s yet to be seen. We believe that they’re working in good faith with us, and they’re well aware of our unique needs … The fact that we’re cut out of this one program doesn’t mean anything for us.”