This week, the House Committee on Energy and Commerce is holding an oversight hearing on the Federal Communications Commission (FCC). After the sizable investments in broadband included in previous COVID-19 legislation and the Infrastructure Investment and Jobs Act (IIJA), this is an important opportunity for lawmakers to hold the FCC accountable for taxpayer dollars as well as discuss other pertinent issues. A briefing memo from the Committee lays out several important topics the Committee aims to address.
Broadband Affordability and Adoption: The Emergency Broadband Benefit (EBB) program was a temporary program included in the Consolidated Appropriations Act of 2021 to assist low-income households with purchasing a connected device and provided a discount for internet service. The EBB program was replaced by the longer term Affordable Connectivity Program (ACP), which provided similar benefits as the EBB program.
Congress should conduct careful oversight of this new program. This includes requiring a report from the Government Accountability Office (GAO) to ensure it is successful in meeting its intended goals. Unfortunately, other broadband programs, like Lifeline, have been subject to waste, fraud and abuse. Lawmakers should press FCC Commissioners on what steps are being taken to avoid similar pitfalls with this new program, as well as evaluate the program’s effectiveness with broadband affordability and adoption.
The Universal Service Fund (USF): The goal of the USF was to make universally available “rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.” The USF is funded through contributions from telecommunications companies that pay a percentage of their interstate end-user revenues into the fund. This percentage of revenue, referred to as the contribution factor, is updated quarterly, and has been on the rise. The cost of this contribution is generally passed onto the consumer and amounts to a regressive tax as it disproportionately burdens low-income Americans.
Thankfully, IIJA directed the FCC to evaluate the future of the USF. This is an important topic as the USF is in desperate need of reforms. Congress has an important role in reforming the USF. NTU has proposed bringing the USF on-budget as a straightforward solution. This should be matched with spending cuts to ensure this on-budget increase does not increase deficits. Another reform worth evaluating further is a voucher program. Rather than providing telecommunications companies with funding to pass along to consumers, providing consumers with a voucher could increase choice by allowing consumers to choose the service best for them. Again, Congress should be wary of creating a runaway spending program.
There are also reforms that have been put forward that should be avoided. One proposal would expand contribution requirements to edge providers, or “Big Tech.” Taxing Big Tech companies to fund the USF may have some political salience, but it would be a step in the wrong direction. Attempting to make a service more ubiquitous by taxing it makes little sense. This could also lead to higher costs for consumers or negatively impact the services they enjoy. It is also unlikely the FCC has the authority to expand the contribution to edge providers.
Mapping: IIJA mandated that broadband funding be prioritized for unserved areas, then underserved areas, and then anchor institutions. An instrumental component of this funding mechanism is new, updated, granular maps from the FCC. With recognition that previous maps may have overstated broadband access in some areas, more granular maps will hopefully provide a better understanding of where further investments are needed. Congress should continue to hold the FCC accountable to produce these maps as quickly as possible.
Spectrum: The Committee is also set to discuss the spectrum pipeline and renewing the FCC’s spectrum auction authority. The FCC was authorized to conduct spectrum auctions in 1994, but absent Congressional action, this authority will expire in September 2022. This would mean the FCC would lose the ability to hold spectrum auctions, grant spectrum licenses related to those auctions, and other functions. This would be unwelcome news for taxpayers and consumers.
Spectrum auctions have proven to be a critical tool to allocate a scarce resource. They also provide another source of revenue for the federal government that can be used for deficit reduction. In the race for 5G, it is important that spectrum is being allocated efficiently to meet the needs of consumers and new technologies. The federal government should continue to examine opportunities to reallocate unused or underutilized spectrum, especially within the federal government.
Not Listed in the Memo: While the background memo covers a lot of important issues, there are two topics we believe lawmakers should bring attention to.
- Interagency Coordination: The debacle of 5G deployment caused by disagreements between the Federal Aviation Administration (FAA), FCC, and National Telecommunications and Information Administration (NTIA) was just the latest example of the federal government rowing in different directions. Since then, the FCC and NTIA announced a new initiative to improve coordination. While this is a positive first step, lawmakers should continue to press the FCC to continue coordination efforts and avoid unnecessary delays. Congress should ask Commissioners about the status of this new initiative with the NTIA, as well as if there is any work being done to coordinate with other agencies.
- Regulatory Reform: The recent and substantial funding for broadband in IIJA is primarily being distributed through NTIA. However, to ensure these taxpayer dollars are being spent appropriately, lawmakers can inquire about what regulatory reforms the FCC are working on, and what changes need to be made through Congressional action. The FCC’s recent attention on pole attachment fees is just one example of how regulators can help streamline broadband deployment. Lawmakers and regulators should continue to streamline regulations to ensure taxpayer dollars meant for broadband infrastructure and expanding internet access are not sucked up by onerous regulations or excessive fees.
Hopefully, this oversight hearing will provide useful updates for taxpayers. Despite being at a 2-2 split at the FCC, Commissioners have been able to work on common-sense issues and should continue to do so. As the FCC continues to work on important issues, oversight and transparency will be key to protecting taxpayer dollars.