Broadband ‘Catnip’ to Both Political Parties, Industry Executive Says

WASHINGTON — Both sides of the U.S. Congress are viewing high-speed broadband as essential. Now, the industry players will have the challenge of reconfiguring a private business model to fit that of a utility, said Rhod Shaw, chairman of the Alpine Group, Wednesday. 

The growing attention on broadband brings an added level of oversight, he said at The Independent Show, sponsored by America’s Communications Association, ACA Connects, and the National Cable Television Cooperative. This growing attention comes with strings attached, he cautioned. Not only are utilities regulated, he explained, but by becoming infrastructure, broadband now has an array of expectations tacked onto it being “a given.” 

“What you are seeing is a lot of money moving into the ecosystem; what you are not seeing is a commensurate recognition that the regulatory environment that you operate in also needs to be addressed,” he said. 

“Broadband is now catnip for both Democrats and Republicans,” Shaw said. “And so every team has a constituency that is in need of support.” And this support will not be free to the providers accepting federal aid for broadband deployment and adoption, he added.

The Federal Communications Commission is currently missing a Democratic commissioner to complete the dais and a confirmation of who is going to be at the helm as chair. 

“By necessity [the commission] has only been able to move forward in areas of agreement,” said Ross Lieberman, senior vice president of government affairs at ACA Connects. And once it has a “full slate of commissioners,”  he said it will be the Democratic-led FCC that will begin introducing “policies that the Republicans are going to strongly disagree on.” This year, everyone can “take a breath” and see a consensus, “but next year it’s going to be much worse.” 

Shaw, however, expressed doubt that the FCC will be fully staffed in 2022, pointing out that  “no single nomination sits alone in isolation” and he does not know if “there is a deal attractive enough to [Sen. Mitch McConnell, R-Ky.] to seat a third democratic Commissioner.” 

Echoing Lieberman’s “calm before the storm,” Kelley Drye & Warren partner, Thomas Cohen, said that a democratic majority at the FCC will immediately begin tackling the divisive issues like net neutrality and designation of broadband as common carriers of telecommunication services under the Title II of the Communications Act, seeking to regulate internet service providers the same way they do electricity and giving them the ability to regulate rates and practices.

He pointed to the fact the federal government is funding broadband deployment and adoption is not novel, as it has traditionally funded $5 billion and about $2.5 billion, respectively. 

What is unprecedented is that the current funding bills are doubling the amount of the rest of the decade. President Joe Biden’s American Rescue Plan Act alone gives a minimum of $100 million to each state. If the bipartisan infrastructure bill passes, which allocates $65 billion to broadband, “the doubling would continue for another five years.” 

Cohen said the FCC’s Emergency Broadband Program itself has also begun to pay dividends to providers, recalling a service provider telling him they saw an extra $50,000 per month just from the program’s revenue and “others more, others less.” The infrastructure plan is just a “continuation of the Federal government’s” commitment to bringing connectivity to all Americans. 

This time around, however, the tides have changed a bit in that the FCC is not the main agency distributing money for broadband deployment, said Lieberman. A lot of power has shifted to the Department of Commerce’s National Telecommunications and Information Administration, the Executive Branch agency that advises the White House on telecommunications policy issues.

The NTIA is manning three broadband funding programs: the $300 million Broadband Infrastructure Program, the $1 billion Tribal Broadband Connectivity Program, and the $285 million Connecting Minority Community Program. 

The NTIA, Shaw said, will also be developing the rules and deciding how much money each state will have from the $42.5 billion in block grants allocated to them out of the $65 billion. The states will again receive a minimum of $100 million and the NTIA will decide on how to administer the remainder. 

Biden will also be the one choosing the next FCC Chair, Ross added, and that person will know what their “marching orders are.”