Jonathan Chambers from Conexon works with rural electric cooperatives as they bring high-quality Internet access to rural America. When he spoke with Christopher for episode 229 of the Community Broadband Bits podcast last November, he had some choice words to say about how the FCC chose to continue to subsidize big telcos for little return.

They Propose "A Huge Mess"

In a recent post on the Conexon blog, Chambers analyzes “The New Trumpfone Program,” and reveals how proposed Connect America Fund (CAF) subsidies, when applied to real world data, creates outrageous financial waste. While providers can receive up to $17,500 per location in CAF funding, when applied to a per subscriber formula, the figure is $100,000:

There are no U.S. communities where satellite or fixed wireless provides broadband to 100% of the homes and small businesses. Not 80% either, which is the FCC assumption. Not 50% or 25% or 15% or 10% or even 5%. The FCC has data on this. Let’s say, for this arithmetic exercise, that a satellite or fixed wireless subscriber achieves a 15% market share of telephone and broadband service in a rural community.

A 15% market share while receiving $17,500 for every location in an area translates into over $100,000 per subscriber. Should there be insufficient competitive pressure in the auction, the $17,500 per location is a realistic outcome, as is the likelihood of $100,000 per subscriber by some technologies.

Reimburse Per Subscriber

Chambers offers a sensible solution to save CAF funds and direct public dollars in the right direction: reimburse providers for actual subscribers, rather than by location.

The most perverse subsidy incentive is one by which a provider makes more money by not serving customers. That’s the current FCC plan and the basis of many current FCC subsidies. By definition, the high cost subsidy is based on how much a provider is calculated to lose per customer. When the FCC provides funding by location, rather than by subscriber, some technologies will make more money by winning the auction, collecting public funding, and serving no one. Hence the fallacy of the argument that it is less expensive to cover rural...

While Tennessee Governor Bill Haslam’s “Tennessee Broadband Accessibility Act” has been in the news, several other Legislators have introduced companion bills earlier this month that deserve attention.

A Few Gems

SB 1058 and HB 0970, from Senator Janice Bowling and Representative Dan Howell, would allow municipal electric utilities, such as Chattanooga’s EPB, Tullahoma Utilities Board, or Jackson Energy Authority to expand beyond their electric service area. SB 1045 and HB 1410 reclaims local authority for municipalities that want to offer telecommunications service either alone or with a partner.

HB 0970 has been assigned to the House Business and Utilities Committee; SB 1058 was referred to the Senate Commerce and Labor Committee.

Bowling has also introduced SB 1045, a bill that allows municipal electric utilities and electric cooperatives the ability to offer telecommunications services either on their own or with private sector partners. SB 1045 and it’s companion, HB 1410, sponsored by Terri Lynn Weaver in the House, specifies that there are to be no geographic limits to the service area. SB 1045 and HB 1410 are also in the same committees as SB 1058 and HB 0970.

Correcting Existing Problems

The EPB challenged restrictive state law in 2015; the FCC determined that the law was inconsistent with federal goals. The agency preempted both Tennessee and North Carolina's laws that inhibit municipal electric utilities from expanding. When Tennessee and North Carolina appealed the FCC decision, however, the appellate court determined that that states had the right to impose those laws on local communities and reversed the preemption.

Tennessee's current state law prevents municipal electric utilities that offer Internet access and/or video within their electric service area to expand beyond those geographical limits. These new bills propose removing the restrictions; they also contain a clause...

Depending on where you live, there may be more opportunities these days to participate in marches, demonstrations, or community political meetings. Regardless of whether your beliefs lean red or blue, you may be like many other Americans and wonder what the future holds for federal telecommunications policy. Saul Tannenbaum from Cambridge recently wrote a piece that stressed the importance of local decision making authority and how municipal networks can rise above reversals anticipated by the new administration’s FCC.

Tannenbaum looks at four policies that are likely to be or have been adjusted from current practice to a new approach under the Trump administration:

• Digital Inclusion
• Network Neutrality
• Corporate Consolidation
• Privacy

Cambridge has considered developing in its own municipal network for a while and Tannenbaum connects the dots between the investment and local control over these issues. While he describes the situation in his own community, it can apply to many other places on the map; he reminds us that decisions about connectivity can and should be local.

While telecommunication policy is thought of as national, in reality, it’s a matter of whose cables and services reach which home. That decision can be a very local one. A free, fair, open, and affordable Internet for Cambridge is within grasp. All Cambridge needs to do is build one.

By building its own network, Cambridge can ensure that its infrastructure reflects its values and the needs of its residents, not the values and needs of Comcast and Verizon.

Check out the full article, Municipal Broadband Is Municipal Resistance, on Medium.

Commissioner Mignon Clyburn at the Federal Communications Commission (FCC) released a draft of the #Solutions2020 Call to Action Plan and is seeking comments. The plan points to policies to make the communications sector work for everyone.

The #Solutions2020 Call to Action Plan is available here on the FCC website. Public comments are due by January 11, 2017.

What’s In It

The current draft provides policy recommendations that cover almost the entire scope of the communications sector. Here are a few highlights to give you a hint of what’s inside:

• Reforming Inmate Calling Services by establishing reasonable rates
• Improving gender and racial diversity in the tech and broadcasting industries 
• Affirming local control and the role of community networks
• Supporting the FCC’s Office of Native Affairs

Each goal is further broken down into specific policy recommendations. Although touching on many subjects, the plan is only 11 pages long. 

Proposals From the Policy Forum

This draft came out of Commissioner Clyburn’s #ConnectingCommunities tour and subsequent #Solutions2020 Policy Forum. Throughout the tour and at the policy forum, local leaders and stakeholders were able to speak directly about their needs in the community and their ideas for potential solutions. This #Solutions2020 Call to Action Plan gathers all of these ideas into one document to guide policymakers moving forward.

The public comment deadline for the #Solutions2020 Call to Action Plan is January 11, 2017. Submit comments to solutions2020@fcc.gov. See the draft release for more details.