More Competition and Less Regulation Will Expand Broadband Access | Citizens Against Government Waste

More Competition and Less Regulation Will Expand Broadband Access

The WasteWatcher

During the past three months and going forward during the recovery from COVID-19, Americans have benefited from a reduction in more than 630 regulations that affect technology, healthcare, and many other industries and businesses.

Tens of millions of Americans have been working from home and millions of students have been working online, leading to unprecedented use of the nation’s broadband infrastructure, which has held up far better than other countries.  Eliminating or reducing many of the regulations that have hindered innovation and network deployments has helped keep information flowing smoothly and quickly across the internet.  Some of these changes should be permanent. 

But some of what needs to be done to improve and expand broadband access requires legislation.  Such is the case with H.R. 7160, The Expanding Opportunities for Broadband Deployment Act, introduced by Rep. G. K. Butterfield (D-N.C.) on June 11, 2020.  This legislation expands eligibility to receive grants from the Universal Service Fund (USF) to non-Eligible Telecommunications Carriers (ETC). 

As part of the Telecommunications Act of 1996, the ETC provisions were intended to help small local telephone providers increase access to phone services to underserved and unserved communities.  ETCs must be approved by state commissions to apply for grants offered by the Universal Service Administrative Company, which administers the USF.  To receive an ETC designation from a state commission, a company must provide basic voice services within a certain geographical area and agree to be subject to state telecommunications regulations, which can create additional burdens far beyond those already imposed by the FCC.

But the ETC provisions restrict the number of providers that can participate in the Connect America Fund Phase II (CAF II)  and the Rural Digital Opportunity Fund (RDOF) auctions, as the winning bidders would be required to have an ETC designation from the state commission in the geographical areas they have bid to serve.  This requirement hinders expanded broadband service to many communities.

As noted by FCC Commissioner Michael O’Rielly in June 15, 2020 blog post, It is time to get “rid of the mandatory, anachronistic ETC designation … While requiring ETC status doesn’t bar participating by certain providers on its face, it serves as a major obstacle for many companies in practice.  Getting the designation itself can be a time-consuming and resource-intensive process, especially depending on the state jurisdiction in question.  However, that pales in comparison to the added regulatory burdens and litigation risks that come with being subject to state telecom regulation.” 

If the ETC designation cannot be eliminated, Commissioner O’Rielly suggested establishing a “uniform application accepted in all states and a time limit for accepting applications.”  He also said that the continued use of the ETC “application creates regulatory asymmetry in an industry that has undergone a fundamental competitive realignment.”

H.R. 7160 provides a commonsense change to the law that would expand the number of broadband providers participating in the CAF II and RDOF auctions.  This is a simple correction to the law that allows for modern technology to continue to be deployed across the country, and encourages a larger number of  communications providers to participate in programs like the USF high cost program.  It would be another important step in bridging the digital divide. 


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