Jeff Mitchell Lukas LaFuria Gutierrez & Sachs, LLP - PowerPoint PPT Presentation

Jeff Mitchell Lukas LaFuria Gutierrez & Sachs, LLP Tysons,Virginia Hometown: A2, Michigan • B.A., University of Washington 1993 • J.D. Georgetown 1997 • Telecommunications attorney since • 1999 Former USAC Associate General • Counsel and Director of Outsourced Audits Practice focus on rural broadband • and universal service 1 (images courtesy shorpy.com)

 Infrastructure legislation (BTOP-2?)  Federal universal service programs (E-rate, RHC)  FCC highlights  Net neutrality update 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX 2

 Trump Infrastructure Plan • Reports: coming Monday • Goal: generate $1.5 trillion in investment over a ten year period • Will provide match funding for state/local/private investment  $750 billion(?) over ten years  25% dedicated to rural? • Roads, bridges, etc. including “expanding broadband access”  Actual projects to be chosen by states/localities 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX

Broadband bills pending in the House include: “MAPPING NOW” Act (Johnson -OH) would  resume and improve NTIA broadband mapping efforts. “WIFI Study” Act (Costello -PA): would study  using unlicensed spectrum to help support internet traffic management and the potential for gigabit WiFi “PEERING” Act (Long -PA): match funding  through NTIA for building/expanding Internet peering locations in underserved areas; make RHC and E-rate available to connect/maintain. “Broadband Infrastructure Finance and  Innovation Act (BIFIA)” (Lujan -NM): NTIA- administered $5 billion broadband infrastructure bank (loans only). 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX

 “Closing the Digital Divide: Broadband Infrastructure Solutions” (House Hearing, Jan 2018): Witness testimony from Joanne • Hovis (CTC Technology and Energy):  Reducing barriers to private investment only goes so far;  Certain areas, both rural and urban lack sufficient ROI; government can improve private ROI with public funding;  Leverage, don’t preempt, local partners . 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX 5

“Universal service” is a principle that has been recognized for over 100 years: all Americans should have access to communications services. Congress in 1996 extended beyond  basic telecommunications. Authorized the FCC to establish four  programs: High Cost (aka Connect America) – • ensures telephone companies serving rural areas provide affordable services Lifeline – ensures eligible low income • Americans have access to telecommunications Schools & Libraries (E-rate) – ensures • schools and libraries have access to broadband Rural Health Care – ensures rural health • care providers have access to broadband 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX

Assessable Revenues vs. Non-Telecommunications Revenues (2004-2014) 300 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Assessable Revenues Non-Telecom Revenues • High Cost (Connect America) = $4.56 billion • Low Income = $1.51 billion • Schools & Libraries (E-rate) = $2.39 billion • Rural Health Care = $0.30 billion • TOTAL = $8.75 billion

Graphic courtesy Funds For Learning, 2017 E-rate Trends Report https://ecfsapi.fcc.gov/file/101270038100588/ExParte2017E-rateTrendsReport_2018-01-17.pdf 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX

 Scathing Apr 2017 letter to USAC CEO from Chairman Pai re: EPC problems, lack of transparency USAC leadership and management • changes: New CEO; new E-rate VP  Fiber special construction challenges Heightened scrutiny • Unclear/undisclosed review criteria • Unacknowledged policy changes •  Responses: SHLB FCC letters (Apr 2017/Jan • 2018) Education Superhighway: • delaysanddenials.org 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX

Graphic courtesy Funds For Learning, 2017 E-rate Trends Report https://ecfsapi.fcc.gov/file/101270038100588/ExParte2017E-rateTrendsReport_2018-01-17.pdf 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX

 Sufficiency of Cat 2 Wi-Fi budgets: FCC request for comment Five-year school budgets = • $153.47 per student (pre-discount); libraries based on square footage Bureau report due before FY 2019 •  Why are Cat 2 budgets declining? Impact of voice phase down? • Problems using EPC? • Size and implementation of budget • caps? 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX

Program Telecommunications Program Healthcare Connect Fund Authority 47 U.S.C. section 254(h)(1)(A) 47 U.S.C. section 254(h)(2)(A) Discount Urban-rural differential (cost parity) 65% flat rate subsidy   Eligibility Eligible rural health care providers Eligible rural health care providers and consortia  Non-rural if part of a majority-rural consortium   Eligible services Telecommunication Broadband services and equipment   Customary installation charges Customary installation charges ($5K)  Additional options for consortia  Multi-year funding commitments  Network services & equipment (NOCs)  Upfront costs: IRUs, Long Term Leases, Network construction (in some situations)  Telecommunications providers only  Vender Eligibility Any vendor that provides eligible services 2016 Spend $209 million $160 million Funding availability: $400 million annually (of which $150 million max available for HCF long-term support) 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-86XX

$400 million cap hit in FY 2016  2016 pro rata reductions 7.5% • Cap hit again in FY 2017 • 2017 funding decisions still pending • Notice of Proposed Rulemaking  (NPRM) and Order (Dec 2017) Order: rollover funding for 2017 • NPRM: initial comments Feb 2; replies Mar 5 • Increased Enforcement Activity  DataConnex NAL (Jan 2018) • Connect2Health Task Force  Request for comments on broadband- • enabled health care. Joint project with the National Cancer Institute • (NCI) to study how increasing broadband access and adoption in rural areas (Appalachia) “can help address the burden of sympto m management for cancer patients.” 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX

8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-86XX

8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (703) 584-86XX

 NPRM: Mostly focused on Telecom Program • reforms Implementing a priority system • could severely impact HCF consortia  SHLB health group: Double size or take Telecom • Program out of cap; index Limit max pro rata reduction for most • rural Implement differential discounts in • HCF Don’t create “priority 2” •  AT&T and US Telecom: Reform program before increasing • cap 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX 16

8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX

Business Data Services Order (BDS)  Acknowledged FCC’s historic recognition of R&E • networks as providers of private not common carriage Broadband Development Advisory Committee and  proceedings to streamline deployment of 5G and fixed broadband Section 706 report issued (Jan 2018)  Requires FCC to “encourag e the deployment on a • reasonable and timely basis of advanced telecommunications capability to all Americans” – currently defined as fixed broadband of 25/3 Concluded FCC is now doing that – citing the many • deregulatory actions taken, including net neutrality reversal – but asserts conclusion will not slow efforts to bridge digital divide. • Slammed by minority for shifting from whether rate of broadband deployment is acceptable vs. whether FCC is taking sufficient actions: 19 million Americans in rural areas lack 25/3  12 million school-aged children affected by Homework  Gap 8300 Greensboro Drive Suite 1200 McLean, VA 22102 www.fcclaw.com (image courtesy shorpy.com) (703) 584-86XX