NRRI 17-03 Broadband Adoption

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Create DateJune 30, 2017

The Telecommunications Act charges the Federal Communications Commission (FCC) and the States with ensuring that all Americans have access to "reasonably comparable" communications services, including information services, at "reasonably comparable" prices regardless of where they reside.
Consumers in all regions of the Nation, including low-income consumers and those in rural, insular and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas. (Telecommunications Act of 1934, as amended)
As the communications ecosystem transitions from a voice-centric to a broadband focused environment, these "comparable" telecommunications and information services have become a critical issue for federal and state regulators. Full participation in 21st century society increasingly requires high speed access to the civic, educational, and health services often available only through the internet. This has made increasing the availability and adoption of broadband a key goal of both the nation as a whole and the individual states on behalf of their citizens.
At the federal level, the FCC has used the Universal Service Fund (USF) for high cost support, rechristened the Connect America Fund (CAF), to extend broadband availability, redefine broadband speed requirements, and create initiatives to deploy broadband services in remote and high cost areas. Key FCC initiatives have included "transforming" the process for assessing access charges, allocating funding to broadband initiatives, establishing the CAF as a high cost support mechanism focused on extending broadband to rural areas via targeted investment; revising the way in which support is provided to rural carriers by moving from a rate of return mechanism to a model-based system; and redistributing unclaimed CAF funds to carriers willing to provide service to high cost areas where there are no unsubsidized providers. Under these programs, the FCC has also sought to fund broadband deployment on a more technology neutral basis, including proposing support for the deployment of mobile broadband services (commonly referred to as 5G) and supporting the use of fixed wireless and satellite providers to bring service to areas where building physical facilities would be too difficult or expensive. Finally, to increase broadband adoption, the FCC has revised the Lifeline program to focus on providing broadband to low income consumers by reducing and eventually eliminating funds for voice only programs while moving the program to broadband services.
According to the FCC's 2015 Internet Access Services Status Report, broadband penetration is increasing rapidly, at least in urban areas where carriers can establish a business case to support investment in the facilities necessary to support high speed service. Nearly 90% of Americans now have access to broadband at speeds of 25 Mbps/3Mbps or higher. But 10% of Americans, primarily those in rural, insular, or low income areas continue to be either without service altogether or to have service only at lower speeds. These consumers remain on the wrong side of the digital divide, dependent of the federal government and the states to bring them closer to the "comparability" benchmark.
At the same time that penetration is increasing, studies show that the broadband adoption rate has slowed, with fewer first time customers adopting wired high speed service for a variety of reasons, including price and a preference for mobile alternatives. This leaves the States with the key tasks of supporting increased deployment while identifying strategies for ensuring service adoption.
The States have met the challenge of increasing broadband deployment and adoption through a variety of initiatives, including direct funding, partnering across state agencies and industry to fund broadband build-out, "retooling" state USF rules to include broadband deployment in programs like Lifeline, and refocusing existing universal service funds from voice support to broadband build out, particularly in those areas where competition allows the state to divert high cost funds from subsidizing incumbent carriers to supporting broadband deployment.
All 50 states and the District of Columbia participated in NTIA's broadband mapping initiatives to identify areas where broadband is, and, most importantly is not available in order to target areas in need of support. States like Virginia and Nebraska have used state funds to keep these maps up to date, while others, like Missouri, are moving to reestablish those programs as the need for broadband grows. The States are also providing grants and matching funds to incent broadband build-out and working through their state broadband councils and task forces to develop strategies for ensuring that broadband is available and useable. Although these organizations are important conduits for state funding and support, they are often separate from the state public utility commissions and thus may not benefit from their direct knowledge of consumer needs and issues. Closing the gap between these entities will ensure that broadband deployment and adoption address key constituent needs.
During the 2017 sessions, state legislators have continued to focus their efforts on increasing broadband deployment and availability through direct state funding, simplified deployment rules, and creating long term strategies to build state networks where federal initiatives do not provide sufficient support. Legislation in 2017 has increased funding for broadband deployment and proposed tax incentives for companies that provide broadband in unserved and underserved areas. Bill have also supported public/private partnerships to enhance broadband deployment by providing a path to municipal broadband installations in areas without unsubsidized competitors, creating middle mile networks open to all providers, and sharing unused state infrastructure with commercial deployments. Legislation in three states, New Mexico, Oregon, and Utah has revised the state universal service fund to include funding for broadband eligible telecommunications carriers. Finally legislation in seven states has charged state commissions, broadband task forces, and broadband councils with creating long term strategies to increase service availability and create plans for enhancing adoption. This paper reviews these state efforts to increase broadband availability and adoption. It addresses both federal and State initiatives, examines the current status of state broadband programs, and proposes ways in which the State Public Utility Commissions and work with the independently created state broadband organizations to align their missions to ensure the greatest benefit to citizens.
As the transition to broadband moves forward, states will need to address three key questions to meet their broadband goals:
• As broadband replaces voice as the primary focus of the federal universal service program, how should the states respond?
• How can state commissions measure and improve broadband adoption, particularly in rural areas and areas with lower economic status?
• How should state commissions work with broadband commissions, government task forces, and separately constituted broadband authorities to manage broadband deployment and adoption?
As the National Broadband Plan points out "broadband is a transformative general purpose technology" that will improve the life of all citizens if they can access and adopt it. The states play a crucial role in encouraging broadband deployment and creating programs to ensure that their citizens have the ability to fully adopt the changes it will make possible. By reviewing the ways in which the states have responded to the need to implement broadband and encourage service adoption, we can identify and promote best practices for embracing this critical new technology.
Broadband deployment and adoption will continue to be the key issues facing the states in the 21st century. By sharing information and best practices with each other, the states will continue to be the key laboratories for creating and testing the solutions to the problems of their citizens

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