https://www.nationalreview.com/2024/05/bidens-rural-broadband-push-is-a-slow-motion-train-wreck/

 

Biden’s Rural Broadband Push Is a Slow-Motion Train Wreck

May 4^th, 2024

By Michael O’Rielly

 

Two years after the bipartisan Infrastructure Investment and Jobs Act (IIJA) committed $7.5 billion toward Joe Biden’s goal of 500,000 new electric vehicle (EV) charging stations, his administration has built a whopping seven. Not 7,000. Just seven. But even that “painfully slow rollout” is starting to look like a land speed record compared with the slow-motion train wreck derailing the administration’s rural broadband promises.

 

Alongside its funding for EV chargers, the IIJA also committed a staggering $42 billion for the even tougher challenge of bringing high-speed internet access within reach of every American household. Now, both efforts are now floundering for the same reason: the Biden appointees holding the purse strings seem more interested in advancing ideological agendas than in delivering on Congress’s bipartisan mandate to Build, Build, Build. Faced with a choice between appeasing unions and accelerating construction, Biden’s Federal Highway Administration (FHWA) appointees chose to suffocate the EV-charging program with arbitrary labor mandates not found anywhere in the law Congress passed. Now they look on bewildered wondering why their program has become a punchline.

 

Meanwhile, on the rural broadband front, the Commerce Department’s National Telecommunications and Information Administration (NTIA) has decided to openly defy Congress by launching a quixotic crusade to mandate a specific price on the service plans that participating broadband providers must offer low-income customers. Never mind that the IIJA explicitly forbids broadband price regulation, or that Commerce Secretary Gina Raimondo promised Congress that her team would never force states to dictate prices. NTIA has now fully backtracked on that commitment — caving to activists’ demands for price controls, holding back funds from any state that dares questions the legality of those demands, and spinning pliant journalists with the fiction that unlawful price caps were always an integral part of Congress’s plan. 

 

In truth, NTIA’s price control demands are directly undermining the goal of universal broadband, in two critical ways.

 

First, by choosing this hill to die on, NTIA is adding months of delays by ensnaring itself in entirely avoidable fights with state broadband offices. The infrastructure law requires each state to submit to NTIA for approval a plan for this federal funding. Recognizing the law’s clear prohibition on price regulation, Virginia, Florida, and other states have resisted NTIA’s arm-twisting to mandate specific price points in their state plans. NTIA bureaucrats have petulantly responded by refusing to sign off on those states’ plans and refusing to release their funding to get started on network expansion projects. In fact, 30 months after the IIJA’s passage, NTIA has approved only four state broadband expansion plans — an infuriating display of bureaucratic malaise that makes the FHWA’s EV rollout look positively speedy by comparison.

 

But even if NTIA “succeeds” in unlawfully bending states to its will, that would quickly prove a pyrrhic victory. After all, Congress’s prohibition on price controls was not an oversight but rather an intentional recognition that price regulation would repel the private investment crucial to making the IIJA’s rural broadband goals a success.

 

Rural network-construction projects are wildly expensive, aiming to connect lightly populated areas with relatively few potential customers to offset the cost. IIJA-grant subsidies will help make these projects economically feasible — but every added mandate, restriction, and bureaucratic demand that NTIA layers onto states’ grant programs tilts the economic balance back in the wrong direction. If you push too far, the broadband providers estimating the investment risks may soon decide that it’s not worth it even to apply for funding.

 

That would leave rural communities with fewer interested participants, including inexperienced internet providers better at making promises than delivering world-class networks. Some $42 billion could go out the door with relatively little show for it — a supersized sequel to the abysmal results produced by Obama-era rural broadband boondoggles.

 

The infrastructure bill was a historic, bipartisan breakthrough, with pluses and minuses. But the bill’s broadband promise and potential will go up in smoke if the Biden administration doesn’t restrain its ideological impulses to steal defeat from the jaws of victory.

 

Michael O’Rielly served as an FCC commissioner from 2013 to 2020.

Biden’s FCC wants to control the internet
By Michael O'Rielly

People have watched the Biden administration employ a wide array of aggressive regulatory policies that increasingly restrict American companies and constrain economic growth. And although the competition is stiff, it would be hard to find a more hostile regulatory barrage than what has been coming out of my old institution, the Federal Communications Commission.

Under the nice-sounding but flawed initiatives on “net neutrality,” “digital anti-discrimination,” and “data security,” the FCC has broken out of its statutory moorings and charted a reckless 270-degree bearing toward total government control over the broadband sector.

Take, for example, the agency’s recent digital discrimination order. After searching high and low for discriminatory practices, the FCC found providers were only following economic incentives. Instead of simply embracing this good news, the FCC decided to read into the infrastructure law a mandate to give itself near unlimited powers to declare broadband providers, and the array of companies and individuals tangentially connected to them, guilty of discrimination if some statistician somewhere could find the uneven outcomes that are the certain result in any large human endeavor. As a result, broadband providers will now be subject to the whims of left-wing groups deputized by the agency to sully company names and reputations unless they seek and obtain political protection.

In the case of data security, Congress specifically passed a law halting FCC action on setting new security requirements for broadband providers. Lawmakers also used the Congressional Review Act to nullify the FCC’s 2016 data security regulations. Notably, the CRA explicitly prohibits agencies from adopting future rules that are “substantially similar” to the rejected ones. Despite that prohibition, the Biden FCC has promulgated “new” rules that look a lot like the old ones, forcing broadband providers to live in a world of uncertainty until the FCC’s mess can be litigated in court.

Which brings us to the FCC’s ham-fisted decision to regulate internet providers as if they were 1930s Ma Bell public utilities. The original “net neutrality” argument that internet providers would block or slow competitors’ traffic has become less and less credible as each of the last 20 years passed without a problem. But no matter, the Biden FCC simply conjured up a new rationale to classify broadband providers as utilities in need of oversight and innovation-killing price controls. Now public and scheduled for a vote in a few weeks, the end result is a fait accompli.

None of these three regulatory policies have been promulgated to fix any real problem. Instead, their aim is to give the administrative state more power over the internet.

Seen clearly, the great uncertainty providers must fear from these bureaucratic entanglements is a primary feature of the FCC’s actions, not an incidental bug. Broadband providers must now seek agency engagement, assistance, and approval. With agencies empowered to favor some companies and punish disfavored others, broadband providers and the wider industry will become beholden to the government out of fear of retribution.

By smothering the industry with irrational policies, the administrative state will have greater sway over what providers and consumers can do with the technology. None of this bodes well for broadband users or a free society, but it seems to fit nicely within the administration’s goals.

Michael O’Rielly served as a commissioner at the Federal Communications Commission from 2013-2020. He is a visiting fellow at the Hudson Institute and a senior fellow at the Media Institute.

Richmond Times-Dispatch

Commentary: Biden administration is holding Virginia hostage

Virginia’s much-needed rural broadband expansion is being threatened by the Biden administration’s back-door attempt to force a harmful rate regulation mandate on the commonwealth that Congress has expressly forbidden.

When Congress passed the Infrastructure Investment and Jobs Act, it dedicated $42.45 billion to build out broadband to unserved areas of the country. This provision, called the Broadband Equity, Access and Deployment (BEAD) Program, would allocate a much-needed $1.482 billion for broadband buildouts in Virginia to cover an estimated 162,000 locations without broadband access.

As a former commissioner at the Federal Communications Commission and nearly 20-year congressional staffer, including years working for the late U.S. Rep. (and former Richmond Mayor) Tom Bliley, I have traveled throughout the commonwealth for decades hearing exactly what members of the state Senate and House of Delegates have been hearing — Virginians in outlying and even in closer-in “gap” areas need access to fast, reliable broadband.

The good news is that great progress is within reach. Congress has allocated the money, and Virginia is perhaps the best-equipped state in the nation to efficiently allocate those funds. Virginia was an early pioneer in creating and expertly staffing the Virginia Office of Broadband, which has done yeoman’s work, and targeting unserved areas with its own state money.

The bad news is that President Joe Biden’s Commerce Department — which houses the agency in charge of distributing the infrastructure bill's funds — is throwing needless bureaucratic obstacles in the way of progress.

To put it generously, Biden’s commerce secretary, Gina Raimondo, is holding hostage billions in needed broadband funding in order to force Virginia and other states to succumb to an unnecessary, intellectually bankrupt policy of rate regulation. Gov. Glenn Youngkin is rightly pushing back against Biden’s back-door rate regulation ploy, but without a change in the Biden administration’s mindset, Virginia citizens lacking broadband might well face years of delays and needless increases in broadband buildout costs.

Virginia promptly filed all the necessary paperwork ahead of every other state and territory but one. But Virginia’s application suddenly became stuck in bureaucratic quicksand over one issue and one issue alone — the Biden administration’s insistence that Virginia establish a low-cost, regulated broadband service rate, a regulatory measure that is expressly forbidden by the infrastructure bill that established the BEAD program in the first place.

The infrastructure bill clearly states that "(n)othing in this title may be construed to authorize the Assistant Secretary or the National Telecommunications and Information Administration (NTIA) to regulate the rates charged for broadband service."

Answering NTIA’s attempt to bully Virginia into this back-door rate regulation scheme, the Virginia Office of Broadband read this provision right back to them. But Biden’s agency heads persist in defying the law Congress passed in order to establish what amounts to a “government-approved low-cost broadband rate” for the nation, and show other states that Washington, D.C., can bully their way into a rate regulation regime, despite the law, by making an example out of the commonwealth of Virginia.

No matter what Washington, D.C., may want to call it, setting a price is rate regulation. And by holding up Virginia’s application, the Biden administration is not only violating Congress’ bipartisan infrastructure law, but cynically trying to bend Virginians to the administration’s will.

The Biden administration is cynically threatening to let Virginia’s allocated funding sit idle — or worse, be diverted elsewhere.

Gov. Youngkin and the Virginia Office of Broadband are doing the right thing by holding the Biden administration to the law Congress passed and sticking to the solid plans they have drawn up to bring broadband service to Virginia’s unserved areas.

Virginians deserve better than to have last-minute bureaucratic obstacles thrown up in front of their long-needed broadband expansion.

Hopefully, President Biden’s team will see the wisdom of Virginia’s clear vision of expanding broadband and release the money Congress has allocated. Absent that, perhaps the Biden administration will see the citizens from a politically important battleground state rejecting its politicized bureaucracy at the ballot box.

Michael O’Rielly served as a commissioner at the Federal Communications Commission from 2013 through 2020.

U.S. Commerce Department’s Shakedown 

of Virginia Broadband

By Michael O’Rielly

Virginia is extremely blessed with magical landscapes.  With a short drive, residents can reach her urban centers, ocean coastal areas, Blue Ridge Mountains, central farmlands, Carolina border, and more.  The Commonwealth’s diverse geography coupled with a dispersed population, however, can make it incredibly expensive to bring broadband – an important tool in today’s economy – to those Virginians without access to the service.  Progress is being made to overcome inherent broadband deployment challenges, but the Biden Administration is trying to thwart recent successes by erecting a major new obstacle. 

To put it generously, Commerce Secretary Raimondo and her assistants at the Herbert Hoover Building are holding hostage billions in needed broadband funding in order to force Virginia to succumb to an unnecessary, intellectually bankrupt policy.  The existing controversy has been fairly well-documented via letters, agency filings, and even part of a congressional hearing.  Without a change in the Secretary’s mindset, Virginia citizens lacking broadband likely will face years of added delays and increases in deployment costs.

As a former commissioner at the Federal Communications Commission and nearly twenty-year congressional staffer, including years working for the late U.S. Representative Tom Bliley (R-VA, ret.), I had the privilege of travelling throughout the Old Dominion to hear directly about the persistent lack of broadband availability in certain areas.  I often visited the unserved parts of the state, sometimes only a few miles from the I-95 or I-81 corridors.  Heartbreaking stories from families were seared into memory, causing me to demand provider relief and reform of the existing subsidy programs.  After I departed the FCC, Congress allocated hundreds of billions in taxpayer funds in the infrastructure law and other efforts designed, in part, to end once and for all the nationwide lack of broadband access.  In Virginia, Governor Youngkin and Commonwealth leaders took up the baton by aggressively seeking funding, coordination, and creative problem solving. 

Virginia was an early pioneer in creating a state broadband office and targeting unserved areas with its own state money. So, it was well-suited to become the frontrunner in setting up its plan to spend the federal funds made available to Virginia under the Commerce Department’s Broadband, Equity, Access and Deployment Program, or BEAD.  Within the Congressionally mandated structure, Virginia stands to receive approximately $1.482 billion for broadband builds to cover the estimated 162,000 locations remaining without requisite access.  After diligently filing the necessary paperwork ahead of every state and territory but one, its application suddenly became stuck in Rhode Island quicksand.

So why would the Commerce Department intentionally slow down Virginia’s broadband advancements and its builds?  The answer is simple: it is demanding Virginia’s low-cost BEAD broadband offerings establish a specific price.  Despite repeated public reassurances by the Secretary and select staff that BEAD implementation would reject setting specific broadband rates -- an act prohibited by provisions of the infrastructure law -- that’s exactly what is this underhanded attempt is all about.  Contrary to claims being made, setting a price is ratemaking.  And by putting Virginia’s application in purgatory, Secretary Raimondo is trying to bend the state to Commerce’s will.    

Commerce’s foolhardy attempt to set broadband rates may stem from an elitist, it-knows-better mentality.  Knows better than the providers offering such services.  Knows better than the free-market system that would otherwise determine rates.  Knows better than consumers in need of the services. Knows better than the state that has already successfully awarded several rounds of broadband funding. But more likely, Commerce is deviously trying to set this rate because it will help establish a de facto rate across all low-cost broadband tiers, even those outside BEAD.  In other words, few providers will be able to buck Commerce’s “approved rate,” even when the economics show otherwise.  This will inappropriately distort the market, skewing rates for all subscribers.  If you love what Obamacare is doing to America’s health care system, just imagine what the same approach will do for broadband.

Additionally, Commerce doesn’t want any other state to arrive at the notion that it may have much autonomy.  The infrastructure law might have adopted certain state flexibilities, but Commerce is making clear that it has the ultimate say on key matters, the law be damned.  And other states that have followed Commerce’s directive must be shocked to find their applications moved to the top of the pile for final approval.  What serendipity. 

Admittedly, the BEAD program is government funding that naturally comes with some strings.  For good or bad, Congress required a low-cost broadband tier be part of a funding recipient’s offering to consumers.  What Commerce is attempting to do with Virginia far exceeds this provision.  Indeed, it is comparable to the Department of Transportation telling electric vehicles makers, who are similarly subsidized by the infrastructure law, that they can’t charge more than $5,000 for low-cost models.  Such a move would generate immeasurable outrage.   

Ironically, Congress’s goal with the infrastructure law of bringing broadband access to all Americans will be stymied in Virginia, if Commerce’s objections persist.  Virginia’s allocated funding will sit idle, or worse be diverted elsewhere, and plans to build broadband for those unserved will go unmet.  

*    *    *

Near universal support exists for ensuring that all Americans have access to all the benefits of broadband service.  For those families living in Virginia without adequate access to broadband service, your government seems to be abandoning your interests in favor of a harmful policy mandate.  Hopefully, clearer heads will prevail, and Secretary Raimondo will see the wisdom of Virginia’s vision on broadband.  Absent that, perhaps the Biden Administration will realize the citizens from a politically important battleground state won’t appreciate the Old Dominion being punished for rejecting flawed initiatives.

 

 

Fixing the Fixes for Pole Attachments

By Michael O’Rielly

 

Fights over pole attachments — obtaining access and avoiding outrageous rates — have proven to be a serious roadblock to broadband providers trying to build networks to the unserved in our nation.  That’s not just my analysis after listening to enraged parties but the result of numerous public stories and examples from providers.  In fact, the Federal Communications Commission (FCC or the agency) has accumulated an extensively full record after years of taking complaints by those trying to facilitate service to those Americans without.  Similarly, the Commission, which plans to take action next week on a pending item, stated in its draft that, “Key to these broadband projects are the utility poles that support the wires and wireless equipment that carry broadband to American homes and businesses.”  And West Virginia’s State Broadband Office leadership, for example, has publicly declared that reaching pole attachment agreements is the biggest source of delay in deploying federal broadband funding.  Given this, it’s a bit surprising that the Commission seems to be pulling its punches on obvious steps to use its pole attachment authority in ways that would expedite and expand builds.

 

Make no mistake, providing a clearer and cleaner fix to pole attachment disagreements, no matter however reserved the agency may be, is a good thing and deserves praise.  But like all difficult policy calls at the FCC, if you are going to take the criticism, why not do the right thing, if authorized to do so?  Certainly, the Commission didn’t hesitate to push the envelope beyond recognition on the so-called Net Neutrality and Digital Discrimination items — despite the legitimate concerns raised, massive harms identified, and strong opposition presented, including from me.  So why hold back on pole attachments when resolving open issues would do so much good?   

 

Here are just a few areas the Commission could and should have gone further. 

• Bulk Pole Requests — The Commission has an arbitrary threshold of 3,000 poles and fewer for defined processing timelines and getting relief under its make-ready and other Commission procedural remedies.  Yet anyone seeking to build broadband networks in sparsely populated, large areas often seeks more than this threshold.  What do they get under the Commission’s item? Bunk, with the whole issue shoved to the Further Notice and faint language that the agency expects all parties to act in good faith.  If there is a recognition that requests for a number of pole attachments below the threshold deserve regulatory engagement, what logical reasons can be provided to punt on a key matter with an untimed promise of someday, just maybe the agency could possibly consider resolution?Everyone knows Further Notices come with a lower expectation of completion. The only justification I can come up with is the belief that big requests for poles tend to come from larger companies and thus these entities have some leverage in negotiations with pole owners.  Yet, most often the pole owners have absolutely no incentive to strike a deal, especially if the request is made from a larger broadband provider.  Arguably, smaller providers getting run over by pole owners can make a compelling press story.  Few people seem to cry foul over a larger provider being taken to the cleaners by pole owners, even if these same owners are trying to become a broadband competitor.  This is more frustrating if the goal of universal broadband coverage is to be truly supported.  Can a broadband provider break up larger requests into smaller bites below 3,000 to qualify for Commission action or can they at least get help for the first 3,000 poles under Commission procedures?  I don’t see why not.  At a minimum, the Commission could set a hard deadline (e.g., 6 months) for resolving this portion of the Further Notice.  While it should be fixed in the Report and Order portion, it could provide more certainty that some positive decision will be forthcoming, especially as federal, state and local broadband deployment funding is used to support large scale broadband buildouts involving thousands and thousands of poles.
• Cost Allocation for Replacing Filled Poles — Under the current pole attachment regime, replacing filled poles to respond to new requests heavily rests with the pole owner.  But who gets to pay for a replacement pole? The new broadband provider seeking access, of course.  Yet it’s the pole owner who gets great benefit with an updated asset for free. How is that for fair or even justifiable?  If a pole truly needs to be replaced to address new capacity requests, the costs should be shared. Without crafting a sustainable fix, broadband providers can see their pole costs explode, making builds completely uneconomical.  While the proposed order provides some clarity on the allocation of costs around “red tagged” poles, the Commission has left a gaping hole around how to fairly allocate costs for pole replacement in many other situations.  The likely result of the proposed order is that the broadband provider costs will continue to balloon making it difficult to reach unserved communities. If the Commission is not going to directly resolve this reoccurring problem, shouldn’t it at least add it to the Further Notice with the relevant questions and necessary presumptions?  
• Burden for Replacement Poles — On a related matter, pole owners are given too much latitude to determine whether a replacement pole is needed.  Why is that?  They often have a perverted interest in forcing broadband provider to pay to upgrade its physical poles. Shouldn’t there be some basic threshold burden on pole owners before declaring a pole needing replacement, and therefore passing the bill to the new attacher?  If the attacher is not the reason for replacement, why in God’s name should owner not pay for it?  Assuming proper burdens here would be good policy. Yet, despite the industry ask to do so, nothing made it into the item. Huh.

 

This represents just three segments of pole attachment fights demanding added attention and positive resolution.  There are many more.  And don’t get me started on the exemption in current law for certain poles being governed by longstanding FCC procedures.  At least in that case, the Commission may have a legit reason to withhold action — even if Congress does not. 

 

* * *

 

For the last 20 or so years, almost every policymaker I know has sought greater broadband availability.  Some go as far as calling broadband a necessity on par with water and food.  But in the tedious process to make this a reality, somehow the requisite nerve turns to caution. Although not easy, improving the FCC’s pole attachment structure is critical. Doing so in a way that maximizes broadband buildout — like the three edits I and others have suggested — would go a long way to making broadband universal. 

* As always, nothing in this document is intended to influence or advocate for actions before the staff at the Federal Communications Commission. These views are raised publicly for general discourse.