Tech experts hope for friendlier regulations for broadband deployment in 2018

Tech experts hope for friendlier regulations for broadband deployment in 2018

Tech experts hope for friendlier regulations for broadband deployment in 2018

Johnny Kampis

February 16, 2018

This article originally appeared on on February 13, 2018

Some tech policy experts anticipate changes at the federal and state levels this year to aid faster broadband deployment.

In some cases, though, that likely will involve spending more taxpayer dollars.

President Donald Trump has indicated he plans to move forward with increased infrastructure spending in 2018. Tom Struble, technology policy manager at R Street Institute, said broadband should be a big part of the package, in addition to repairing roads and bridges.

“A lot of that has to include broadband because that is such a needy area,” Struble said.

Others, such as the Taxpayers Protection Alliance (TPA), caution the inclusion of broadband spending in the infrastructure bill because of the failure of taxpayer-funded networks across the country.

Christopher Yoo, a University of Pennsylvania Law School professor, found in a 2017 study that just two of 20 government-owned networks examined are expected to generate enough revenue to recoup the costs of construction and operation.

Eleven of the 20 have a negative cash flow and are expected to never turn a profit. The government broadband network in Powell, Wyoming, should turn a profit in 1,253 years, according to Yoo’s research. 

An idea has been floated of a federal middle mile, essentially a build-out of fiber along the American interstate system. There were reports that the federal government considered getting involved in creating a national 5G wireless network, but the Trump administration said that wasn’t true.

Struble said he can’t imagine a Republican-majority Congress supporting a federal build-out of broadband infrastructure, but he could see more funds put into a U.S. Department of Agriculture program designed to aid rural broadband growth.

“If the federal government puts public dollars into broadband, I think it will come in the form of the Rural Utilities Service (RUS), which offers block grants to ISPs to build broadband infrastructure in rural areas where there isn’t enough demand for the market to deploy on its own,” he said. “I think that’s a likely place that Republicans would be willing to support spending federal dollars when it goes to rural broadband because the urban-rural broadband divide is much more stark than the rich-poor divide.”

But a Government Accountability Office report in 2014 said RUS’s rural broadband loan program was plagued by low uptake and poor program efficiency. TPA is among the groups that have called the program a waste of money for these reasons and have fought against increased funding for it.

Brent Skorup, senior research fellow in the technology policy center at the Mercatus Center at George Mason University, said he supports a Federal Communications Commission (FCC) effort to reform the Universal Service Fund’s Connect America program, including implementing a reverse-auction procedure that would ensure that low bidders are the ones who get the ratepayer money to complete rural broadband projects.

“I think there will be an effort to spend existing funds better,” Skorup said.

He also sees a move toward less-stringent regulations in 2018 to better enable broadband growth, pointing out that Trump has noted the lengthy permitting process in his discussions on infrastructure.

In January, Trump signed executive orders that declared the executive branch would use all viable tools to accelerate the deployment of rural broadband and help make it more affordable.

Those orders require that executive departments work “to reduce barriers to capital investment, remove obstacles to broadband service and more efficiently employ government resources.”

Tiffany Moore, vice president of government affairs for the trade group Consumer Technology Association, said regulatory hoops remain a major issue, including the added burden of environmental pushback from the federal government.

“That can be increasingly cumbersome, particularly at the federal level,” she told USA Today.

New technologies, burdensome regulations

Skorup said a move toward 5G and its promise of gigabit-capable speeds is on the horizon.

“I think wireless is certainly going to be a big part of the future,” he said. “With the development of 5G technology, it will become more feasible for people to go wireless-only for phone and broadband.”

So it stands that governments should make permitting faster for such necessities as cell-tower upgrades and other equipment.

“This is a light-touch way to improve accessibility,” Skorup noted.

A trickier issue is one-touch, make-ready, a movement toward allowing contractors to rearrange all cables on utility poles to expedite installation. It sounds good in theory, but the policy has the potential to infringe on the rights of incumbent providers whose equipment could be damaged, as well as violate their contracts with unions. A Nashville policy designed to speed up the installation of Google Fiber was struck down by a federal judge in November after AT&T and Comcast sued the city. A similar policy was allowed to stand by a federal judge in Louisville, who argued the city had the right to control its public rights of way.

Skorup, who serves on the FCC’s broadband advisory committee, said the issue of one-touch, make-ready, has been discussed in meetings and that the FCC may issue an advisory ruling on the topic.

“The FCC is certainly aware of the need for speedier deployment of broadband infrastructure,” he said. “This is a big issue.”

Cities eye a bigger piece of the taxpayer pie

Struble said some cities are charging market-based fees – what he calls “eye-watering prices” – rather than the actual cost of maintenance to providers for access to utility poles, cell towers and the like. He said it’s a sneaky way to capture more revenue without passing a tax. And when the increased costs to providers are passed on to consumers, the public’s ire is directed toward those businesses.

“We’ve argued the FCC should come in and preempt these localities that are charging broadband providers out the ear to get access to public rights of way, which they need to do to deploy or upgrade infrastructure,” Struble said.

It’s not so cut-and-dried, however, as it’s unclear if the FCC has the power to preempt local regulations. But he noted that states absolutely have that authority.

“I think that would be a tremendous help – probably more than anything Congress at the federal level could do – if states could force localities to adopt more favorable deployment regulations and laws,” Struble said.

One issue Congress could certainly help with, he noted, is increasing the depreciation rate for equipment used in internet deployment. He noted that copper is still more common than fiber in many rural areas, as providers are slow to make the costly upgrade to the newer technology.

“To get more competition and choice in the short term, what we need is for the telecos to upgrade their networks, supplement their copper with more fiber so they can get faster speeds, and one of the easiest ways to do that would be to allow them to write off all of their copper wiring as depreciating assets.”