IMPACT 20/20 Submits "Reply Comment" to FCC

Broadband reform is coming, but for many Northwest Minnesotans, it cannot come soon enough. Just ask Jeff Menten, a home-based business owner from the Park Rapids area.  Menten needs broadband for his business and has concerns about the future of his business without it. 

“Since our business is home-based, we desperately need broadband,” Menten said. “The cost of satellite internet is much too high, yet we can hardly manage business with dial-up service. We are concerned that we may have to downgrade to dial-up and that would be disastrous for our business.”

IMPACT 20/20, a collaborative effort of several Northwest Minnesota leaders, has decided to tackle the rural broadband issue head-on, and for good reason.
While many in Northwest Minnesota consider themselves to have adequate broadband access, there are pockets within the region where there is either no access or speeds that are simply inadequate.  In fact, U.S. Census Track data reveals that there are over 3,600 households within the region that are without any available broadband connection.

Earlier this spring, the Federal Communications Commission (FCC) issued a “Notice of Proposed Rulemaking” (NPR).  The NPR addressed many complex issues, including reform of the Universal Service Fund (USF).  IMPACT 20/20 posted a reply comment to the NPR in May, urging the FCC to reform the USF and make it a critical component of our national broadband strategy. The NPR has moved through both the comment and reply comment periods and is expected to be on the August docket of the FCC.

Although the private sector has been successful in bringing affordable high-speed internet access service to most Americans, bringing broadband to unserved or underserved areas and promoting adoption of services by underserved segments of the population (e.g. low-income consumers) will require sufficient financial support from the federal government.  IMPACT 20/20 believes that the USF will be a critical component in providing universal and equitable access to broadband services. 

It should be noted that the USF is not funded by tax dollars.  It is funded each time a phone bill is paid.  A quick look at any phone bill will reveal a line item labeled “Federal USF Charge.”  These funds are paid to the federal government and placed in a pool.  In the past, these pooled funds were restricted to supporting the installation of telephone service.  The recommended reform would remove the restriction and allow the funds to also support the installation of high-speed broadband services.

IMPACT 20/20 has set a goal that all residents of the region will have access to broadband speeds of at least 10 Mb download and 5 Mb upload.  Currently, the average download speed in Northwest Minnesota is only 2.4 and the average upload speed is only 0.8. (Source: Minnesota Ultra High-speed Broadband Report.) A quick comparison of urban vs. rural speeds highlights great disparity.  While broadband has the potential of leveling the playing field between rural and urban areas, a lack of investment into infrastructure in rural areas will further deepen the digital divide.  Large pockets of our country – including Northwest Minnesota – will be left behind.  USF reform is an important step in correcting the inequity.

IMPACT 20/20 is a dedicated group of Northwest Minnesota leaders representing diverse interests and working together for the region’s economic success. These leaders are passionate about Northwest Minnesota and its future as a place where people choose to live and do business. They believe that high-speed broadband is one of the most important components of our rural economy, now and into the future.

For more about IMPACT 20/20, visit www.impact2020.org.

Kerry and Warner Urge Reforms to Broadband

FOR IMMEDIATE RELEASE: July 5, 2011

WASHINGTON, D.C. – Senator John Kerry (D-Mass.), Chairman of the Commerce
Subcommittee on Communications, Technology and the Internet, joined Senator
Mark Warner (D-Va.) in a letter today to the Federal Communications
Commission urging reform of the Universal Service Fund in order to better
deploy broadband service across the country.

The Senators urged the Commissioners to use broadband funds to bridge
private sector investment gaps, provide strong accountability and oversight
of the funds, and deliver high-speed broadband service that keeps pace with
new technologies over time.

The full text of the letter is below:


July 5, 2011

The Honorable Julius Genachowski
The Honorable Michael J. Copps
The Honorable Robert M. McDowell
The Honorable Mignon Clyburn
Federal Communications Commission
445 Twelfth Street, S.W.
Washington, D.C. 20554

Dear Commissioners:

We write in support of your efforts to reform the Universal Service Fund
(USF) to support broadband delivery. Broadband is no longer a luxury; it
has become critical economic infrastructure for Americans. Unfortunately,
broadband is still an expensive and uneven service in parts of the country.
It is very important that all Americans have access to both fixed and mobile
broadband services at an affordable price.

The Commission identified "investment gaps" in the National Broadband Plan
which would require $23.5 billion to finance a minimum 4Mbps download/1Mbps
upload for the entire country. The cost of upgrading to fiber-to-the-home
would increase the cost to approximately $55 billion. This is a significant
amount of money. Given that the High-Cost Fund outlays have been $4.27
billion for 2010, $4.3 billion in 2009, and $4.24 billion in 2008, we will
only reach these goals if we know exactly where we need to deploy and
support high-speed broadband service.

Therefore, we urge you to take the following measures as you move forward to
establish the Connect America Fund:

1. Use broadband funds to bridge private sector investment gaps.

The Commission should require that funds allocated through the proposed
Connect America Fund are used to prioritize areas without any broadband or
where no provider offers service at a baseline level of transmission speed,
as determined by the Commission.

We should also prioritize for funding those areas that are least likely to
be built out over the next three-to-five years because their geographic
and/or demographic profile make them insufficiently profitable based on
commercial business models. While coverage plans should include adjacent
communities so that isolated communities are included, funds should be
targeted to the portion of a project that covers territory where broadband
at a baseline level is unavailable. The National Broadband Map released in
February 2011 was the first attempt at mapping on a nationwide level.
Therefore, we ask that the Commission update the investment gap estimates
with more granular data as soon as a more complete version of the map is
available. As an example, Virginia’s state broadband availability map
provides data at the more useful address-level, not just at the Census-block
level.

The Commission should revisit this baseline level annually and should set
goals for minimum target speeds for broadband that would be required to
qualify for funding. This should not be a static issue, when nothing else
in the technology world stays as it is forever. 4 Mbps download is an
acceptable speed now—it will not be in 10 years.


2. Provide strong accountability and oversight.

Any new broadband program must include strong accountability measures to
ensure that funds are being spent to achieve goals including universal
broadband access, high-quality service, and greater broadband adoption. The
Commission should also require states to disaggregate study areas in order
to ensure funding is used for broadband deployment in specific areas.
Without an accurate way of targeting unserved communities, it is likely that
high-cost areas that are presently unserved will continue to lack broadband
service in any form.

The Commission should also establish a cap on expenditures to provide an
incentive for service providers to devise lower-cost solutions that meet
nationwide needs for both fixed and mobile broadband. Funding should
require a match from service providers and should be conditioned on
reasonable access and interconnection requirements.


3. Provide high-value broadband service that keeps pace with new
technologies.

The new program should support the deployment of broadband on a targeted,
technology-neutral basis—without prejudice. In some areas, the most
cost-effective service might be fixed, wireless, or satellite services. A
competitively-neutral focus on technology will also enable us to ensure that
consumers receive broadband services that prioritize quality, speed, and
efforts to encourage greater broadband adoption. Therefore, we urge the
Commission to fully consider all options in order to encourage innovation
and the growth of new technologies.

Thank you for your consideration of these views. We encourage you to think
broadly as you seek to reform the Universal Service Fund to support
broadband deployment. It is important that we improve the
cost-effectiveness of the new program, and we stand ready to work with you
in support of these goals.

Sincerely,

Mark R. Warner John Kerry
United States Senator United States Senator