The State of Universal Service (U.S. Senate Committee on Commerce, Science, and Transportation, Subcommittee on Communications, Media, and Broadband)

Hearing	The State of Universal Service
Committee	U.S. Senate Committee on Commerce, Science, and Transportation, Subcommittee on Communications, Media, and Broadband
Date	May 11, 2023

 

Hearing Takeaways:

• The Federal Communications Commission’s (FCC) Universal Service Fund (USF): The hearing largely focused on the FCC’s USF. This Fund seeks to expand access to telecommunications and advanced services (e.g., high-speed internet) to unserved and underserved Americans and involves four programs: the Connect America Fund (CAF), the Lifeline Program, the E-rate Program, and the Rural Health Program. Subcommittee Members and the hearing’s witnesses expressed strong support for the USF and stated that its programs have contributed to advancements in health care, education, and economic development.
  • The USF’s CAF: Subcommittee Members, Mr. Law, and Mr. Guice expressed support for the CAF, which helps to deliver telecommunications services to high-cost areas. They emphasized that this program is especially important to rural areas, where broadband internet deployment may not be economically feasible absent government support. Mr. Law specifically highlighted how the CAF Broadband Loop Support (BLS) has helped smaller providers to engage in rural broadband deployment efforts and asserted that this Program’s budget is too low.
  • The USF’s Lifeline Program: Subcommittee Chairman Ben Ray Luján (D-NM) and Mr. Guice expressed support for the Lifeline Program, which helps low-income Americans afford communications services (including phone and internet services). Subcommittee Ranking Member John Thune (R-SD) and Mr. Lyons raised concerns however that the FCC is failing to measure the Program’s effectiveness at helping low-income people to afford communications services and to police the Program for waste, fraud, and abuse.
  • The USF’s E-rate Program: Subcommittee Democrats, Mr. Chavez, and Mr. Guice expressed support for the E-rate Program, which helps schools and libraries to afford telecommunications and information services. They stated that this Program has been key to addressing education opportunity disparities (especially during the COVID-19 pandemic). Subcommittee Chairman Luján expressed concerns that the Program’s broadband internet support is limited to classroom settings and expressed interest in expanding the Program to cover internet services for student homes and school busses. Subcommittee Ranking Member Thune and Mr. Lyons raised concerns however that the FCC has failed to sufficiently assess the Program’s effectiveness and susceptibility to fraud.
  • The USF’s Rural Health Care Program: Subcommittee Democrats, Ms. Kroenberg, and Mr. Guice expressed support for the Rural Health Care Program, which helps to ensure the availability and accessibility of telehealth services in rural communities. They stated that this Program helps to support access to health care services for many rural and tribal areas, which can help patients to avoid costly health care problems and spur competition among broadband providers.
  • USF Fiscal Sustainability Concerns: Subcommittee Republicans, Ms. Kronenberg, and Mr. Law expressed concerns regarding the fiscal sustainability of the USF’s contribution factor, which is key to funding the USF. The contribution factor is an assessment on voice service providers that is passed onto consumers as a fee in their monthly telephone bills. They expressed concerns that declines in telecommunications revenues has caused the FCC to quickly raise this factor 29 percent and commented that this rate of growth is not sustainable. They further expressed concerns that phone users are disproportionally funding the current USF system.
  • USF Contribution Base Reforms: Sen. Roger Wicker (R-MS), Sen. J.D. Vance (R-OH), Ms. Kronenberg, Mr. Law, and Mr. Guice expressed support for proposals to expand the contribution factor’s base to include broadband provider revenues. However, Mr. Lyons expressed concerns that having broadband providers fund the USF would constitute an underinclusive solution, encourage strategic behavior, and discourage the services that the Fund seeks to subsidize. He recommended that Congress use the appropriations process to support the USF and stated that this approach will increase transparency and allow for greater Congressional oversight of the Fund. Ms. Kroenberg and Mr. Lyons also expressed concerns over proposals to have large technologies support the USF and asserted that these companies are already making critical investments in U.S. internet infrastructure. They cautioned that these proposals could have unintended consequences and reduce innovations.
• Additional Federal Programs and Efforts to Support Universal Service: The hearing also considered several programs outside of the FCC’s USF that are meant to support the U.S.’s universal service goals. Subcommittee Members and the hearing’s witnesses expressed interest in how these programs interact with the USF in pursuit of these goals and whether these programs are being deployed in a coordinated and efficient fashion.
  • The FCC’s Affordable Connectivity Program (ACP): Subcommittee Democrats, Mr. Chavez, Ms. Kronenberg, and Mr. Guice expressed support for the FCC’s ACP. This Program promotes access to broadband internet services for low-income people through a $30 per month subsidy and currently serves over 18 million families. They expressed concerns that the ACP’s popularity may cause it to run out of money within a year and called on Congress to provide this program with long-term and sustainable funding. Subcommittee Ranking Member John Thune (R-SD) and Mr. Lyons expressed concerns over that the ACP might not be properly targeting funds to the most in need people. They cautioned against providing the ACP with increased funding given its untested nature.
  • The FCC’s Emergency Connectivity Program (ECF): Subcommittee Democrats, Mr. Chavez, and Mr. Guice applauded the FCC’s ECF for providing laptops, tablets, and internet services to 17 million students during the COVID-19 pandemic so that these students could continue to access education. They expressed concerns that this Program’s funding might run out soon.
  • The FCC’s Alternative Connect America Cost Model (ACAM): Subcommittee Ranking Member Thune and Mr. Law expressed interest in promoting the ACAM program, which conditions additional support for broadband providers on their commitment to deploying broadband internet services in unserved and underserved areas that meet certain speed thresholds.
  • The Infrastructure Investment and Jobs Act (IIJA): Subcommittee Members and Mr. Lyons expressed interest in implementing the IIJA and noted how this law includes $65 billion to support broadband infrastructure deployment. Mr. Lyons stated that the U.S. should promote policies that would prioritize one-time build outs of broadband infrastructure.
  • Private Sector Investments: Ms. Kronenberg discussed how the world’s largest technology companies have invested nearly $1 trillion in global digital infrastructure and indicated that technology companies are investing over $120 billion on this infrastructure each year. She noted that these investments are in addition to investments in online content, services, and applications.
• Other Universal Service Policy Topics: The hearing further considered additional policy topics related to ensuring that all Americans can access sufficient telecommunications services and technologies in an equitable fashion.
  • The FCC’s Broadband Maps: Sen. Jacky Rosen (D-NV), Sen. Deb Fischer (R-NE), Sen. Amy Klobuchar (D-MN), Ms. Kronenberg, Mr. Lyons, Mr. Law, and Mr. Guice expressed interest in bolstering the accuracy of the FCC’s broadband maps. They stated that the accuracy of these maps is very important given how these maps will be used to inform the deployment of federally funded broadband infrastructure projects. Mr. Guice mentioned how the FCC has a challenge process that seeks to improve the accuracy of the FCC’s broadband maps with a deadline o June 30, 2023. He suggested that the FCC be provided with flexibility to make some updates to their broadband maps after June 30, 2023.
  • Middle-Mile Broadband Infrastructure Deployment: Full Committee Chairman Maria Cantwell (D-WA) and Mr. Guice expressed support for efforts to expand and upgrade the U.S.’s middle-mile broadband infrastructure. Full Committee Chairman Cantwell noted how the U.S. National Telecommunications and Information Administration’s (NTIA) had indicated that it had received 235 applications for middle-mile broadband infrastructure grants and indicated that these applications had requested nearly $5.5 billion in funding. She mentioned how she had introduced bipartisan legislation that would leverage the U.S.’s existing electricity grid to produce cost-efficient, resilient, and fireproof middle-mile broadband networks. 
  • Ongoing Maintenance Support for Broadband Networks: Sen. Gary Peters (D-MI) and Mr. Law highlighted how broadband networks require ongoing maintenance support beyond the deployment phase. Mr. Law noted how broadband networks in hard-to-build areas often struggle to afford these maintenance costs because their customer bases may be too small to cover these costs.
  • The FCC’s Delay in Issuing 2.5 GHz Spectrum Licenses: Full Committee Chairman Cantwell and Mr. Guice expressed concerns over the FCC’s delay in issuing the 2.5 GHz spectrum licenses. Mr. Guice noted how T-Mobile (who had won these spectrum licenses in an FCC spectrum auction) is relying upon the licenses to build out its 5G network in many small and rural markets. He also stated that these licenses would enable T-Mobile to better compete in very concentrated wireless markets.
  • Cybersecurity Challenges for Schools: Sen. Peters and Mr. Chavez expressed interest in protecting school districts from cybersecurity attacks. Mr. Chavez highlighted how school districts are prevented from using E-rate Program funds to purchase antivirus software. He stated that allowing school districts to use Program funds to purchase antivirus software would be beneficial.
  • 911 Infrastructure: Sen. Klobuchar and Ms. Kronenberg also expressed concerns over the U.S.’s current 911 infrastructure and stated that this infrastructure requires modernization. Sen. Klobuchar mentioned how she had proposed legislation to upgrade this infrastructure.
  • Concerns over Extraneous Requirements for Broadband Infrastructure Programs: Subcommittee Chairman John Thune (R-SD) and Mr. Law expressed concerns that many federal departments and agencies (including the NTIA) are including extraneous requirements (such as net neutrality, open access, and burdensome labor requirements) for their broadband programs. They asserted that these extraneous requirements are impeding broadband infrastructure deployment efforts. Subcommittee Ranking Member Thune mentioned how he had recently led an effort from Committee Republicans requesting that the NTIA remove the aforementioned requirements from the Broadband Equity, Access, and Deployment (BEAD) Program.
  • Competition Concerns for U.S. Broadband Markets: Ms. Kronenberg and Mr. Guice stated that many broadband markets are not very competitive and asserted that the U.S. should work to address this lack of competition. Ms. Kronenberg recommended that the U.S. require broadband networks built using government funds to provide access to all broadband providers. She commented that this approach would bring better prices to retail customers, more innovation, and more community investment.
  • Permitting Challenges: Mr. Law remarked that the Committee should review the federal permitting process for broadband infrastructure projects. He recommended that the Committee consider imposing a “shot clock” on federal agencies to review broadband infrastructure projects involving a previously disturbed right of way. He also stated that federal agencies should designate within themselves the proper points of contact for handling permitting issues. He further stated that Congress should be more prescriptive in its laws governing the federal permitting process and not merely provide guidelines and suggestions to federal agencies.

Hearing Witnesses:

1. Mr. Tim Chavez, Director of Technology, Cuba Independent School District, New Mexico
2. Ms. Angie Kronenberg, President, INCOMPAS
3. Mr. Daniel Lyons, Professor, Boston College Law School; Nonresident Senior Fellow, American Enterprise Institute
4. Mr. Denny Law, CEO and General Manager, Golden West Telecommunications Cooperative, South Dakota
5. Mr. Greg Guice, Director of Government Affairs, Public Knowledge

Member Opening Statements:

Subcommittee Chairman Ben Ray Luján (D-NM):

• He remarked that universal service has been a “critical” part of U.S. communications policy since the invention of the telephone.
• He recounted how Congress had passed the IIJA in 2021 and stated that this seeks to provide households, health care centers, schools, community institutions, and businesses with access to high quality and affordable broadband service.
  • He commented that while this law’s $65 billion investments in broadband infrastructure deployment are important, he asserted that the one-time nature of these investments means that they will have a limited impact.
• He also remarked that the U.S. requires programs that can address future broadband connectivity needs and provide affordable broadband service options on a sustained basis.
  • He noted how the Telecommunications Act of 1996 and the FCC’s USF are meant to address these needs.
• He discussed how the FCC’s USF supports four programs to expand broadband connectivity and promote broadband affordability.
  • He indicated that the first program supported by the USF is the CAF, which helps to deliver broadband internet service to high-cost areas.
  • He indicated that the second program supported by the USF is the Lifeline Program, which helps low-income Americans to afford communications services.
  • He indicated that the third program supported by the USF is the E-rate Program, which helps schools and libraries to afford telecommunications and information services.
  • He indicated that the fourth program supported by the USF is the Rural Health Care Program, which helps to ensure the availability and accessibility of telehealth services in rural communities.
• He stated that these programs should prevent schools and hospitals from going without access to broadband internet service.
• He remarked that the hearing would explore lessons learned from the COVID-19 pandemic, federal COVID-19 relief laws, and the IIJA.
  • He commented that the Subcommittee has an opportunity to build upon its work to promote universal service and to identify opportunities for updating, improving, and expanding the four USF programs.
• He then discussed how the communications landscape has changed significantly since the passage of the Telecommunications Act of 1996.
• He highlighted that while students are increasingly using broadband services to learn outside of classroom settings, he noted that E-rate Program funds can only be used to connect school facilities to broadband services.
  • He commented that these Program restrictions “significantly” limit utilization of these broadband services.
• He stated that the FCC’s ECF had played a key role during the COVID-19 pandemic in providing students with access to broadband services outside of classroom settings.
  • He lamented however that the ECF is about to exhaust its funding.
• He also noted how the E-rate Program does not cover WiFi services for busses, which can reduce the ability of lower income students to do their schoolwork.
• He lastly remarked that Congress could take several actions to improve the USF, such as providing schools with more cybersecurity tools, reforming the rural health care statute to prioritize broadband internet connectivity for patients at home, ensuring that broadband internet connectivity for low-income families is secure, and providing stable broadband internet funding to enable better long-term decision making.

Subcommittee Ranking Member John Thune (R-SD):

• He remarked that there has been bipartisan support for universal service for communications services for nearly 90 years.
  • He commented that government programs that support universal service have contributed to advancements in health care, education, and economic development.
• He expressed his commitment to ensuring that all Americans have access to communications services that are comparable in quality and price (regardless of geography).
  • He commented that the USF’s CAF has been “critical” in delivering broadband services to rural areas (including many communities within his state of South Dakota).
• He mentioned how the FCC had unanimously acted in 2018 to provide long-term, sufficient, and predictable funding to rural carriers.
  • He commented that the FCC’s actions had provided rural carriers with certainty for the planning, deployment, and maintenance of rural broadband networks.
• He remarked that the FCC should take steps to update its high-cost programs, such as the ACAM program and the CAF.
  • He commented that updating these programs will play a “crucial” role in delivering high-speed broadband services to high-cost areas.
• He then discussed how the USF still experiences several challenges and asserted that the contribution factor is threatening the USF’s sustainability.
  • He explained that the contribution factor is an assessment on voice service providers that is passed onto consumers as a fee in their monthly telephone bills.
• He highlighted how the contribution factor is currently a “staggering” 29 percent, which he called unsustainable.
  • He mentioned how he had recently reintroduced bipartisan legislation that would require the FCC to update the contribution factor.
• He remarked however any update to the contribution factor should not be viewed as providing the FCC with unchecked authority to unnecessarily expand its USF programs.
• He then discussed the goal of the USF’s E-rate Program is to connect U.S. schools to broadband internet services and highlighted how there have been calls to expand this program for uses outside of classroom settings.
  • He mentioned how the U.S. Government Accountability Office (GAO) had recently found that the FCC has not comprehensively assessed the E-rate Program’s fraud risk.
• He also noted how the GAO has documented the FCC’s failure to oversee the USF’s Lifeline Program and commented that this program has been riddled with waste, fraud, and abuse.
• He criticized the FCC for failing to explore whether the Lifeline Program is increasing telephone subscribership among low-income consumers.
  • He commented that this failure has resulted in the FCC having limited insight into what the Lifeline Program is actually accomplishing, despite the Program’s significant annual disbursements.
  • He called it “long overdue” for the FCC to undertake a “fundamental analysis” of the Lifeline Program.
• He further raised concerns that the FCC’s ACP is experiencing many inefficiencies, which he attributed to the FCC’s failure to make performance goals a priority.
  • He cautioned Congress against injecting the ACP with more funding given its untested nature.
• He then remarked that the U.S. could not achieve its universal service goals without proper oversight of the FCC and the other federal agencies tasked with deploying rural broadband services.
  • He noted how he is engaged in an ongoing oversight effort to review the U.S.’s various federal broadband programs.
• He also mentioned how he had recently joined Subcommittee Chairman Ben Ray Luján (D-NM) in requesting that GAO conduct a review of the effectiveness of federal, state, and local broadband programs.
  • He indicated that this request was in response to a report that found that broadband funding is spread out across 15 separate federal agencies and 133 programs.

Subcommittee Chairman Ben Ray Luján (D-NM):

• He announced how he was launching a Bipartisan Working Group on the USF and Broadband Access.
  • He indicated that Subcommittee Ranking Member John Thune (R-SD) is involved with this Working Group.
• He stated that the hearing would serve as one of the first fact finding exercises for this Working Group.

Witness Opening Statements:

Mr. Tim Chavez (Cuba Independent School District, New Mexico):

• He discussed how his school district, Cuba Independent School District, covers 120 square miles and noted how many of the school district’s students live on tribal lands and have long bus commutes to their schools.
  • He also indicated that many of the school district’s students live in rural and mountainous areas.
• He remarked however that the FCC’s USF (and particularly the E-rate and the ECF Programs) have made “life changing” impacts on his school district’s students through increasing the availability of broadband internet services.
• He expressed support for the USF and commented that its funding supports many rural and tribal communities.
  • He noted how many Native American students and their families lack access to water, electricity, and internet services.
• He noted how his school district’s region contains sections of land divided between the U.S. Bureau of Land Management (BLM), Navajo trust land, and private land.
  • He commented that this mix can make it difficult for easements to get through for traditional broadband internet solutions, such as fiber optic options.
• He discussed how his school district had worked to expand broadband internet services to all of its households and had used the USF to support this effort.
• He indicated that Starlink (which is owned by SpaceX) had provided his school district with an internet solution that avoided easement challenges.
  • He mentioned how his school district had installed some equipment on the existing ground poles and rooftops to secure the district’s broadband capabilities.
• He testified that all of his school district’s students now have a Starlink satellite system that runs high-speed internet.
  • He noted how this satellite system also supports remote learning during days where school must be canceled due to weather issues and pandemic restrictions.
• He stated that this Starlink satellite system connects his school district’s students socially, emotionally, and financially and indicated that his school district will connect new students to its Starlink satellite system.
• He asserted that federal funding is “critical” to providing the necessary resources for his school district to continue its broadband internet deployment efforts.
  • He expressed support for expanding the USF (and the E-rate Program) so that other school districts can improve broadband access for their students.

Ms. Angie Kronenberg (INCOMPAS):

• She explained how INCOMPAS is the leading trade association advocating for competition and innovation within the communications marketplace.
  • She indicated that INCOMPAS represents competitive broadband companies and leading internet companies that are driving consumer and business demand for broadband internet services.
• She remarked that the USF is “extremely” important to INCOMPAS members and testified that most INCOMPAS network provider members participate in at least one USF program.
  • She also noted how INCOMPAS members are required to contribute to the USF based on their telecommunications and have needed to deal with the increasing contribution factor.
• She stated that while the USF is “critical” for telecommunications connectivity, she noted how millions of Americans remain unconnected to broadband internet services.
  • She added that many Americans have limited or no choices for their home broadband internet service.
• She remarked that broadband service competition would help the U.S. to achieve its broadband connectivity goals.
• She stated that the USF, Congressional funding, and private investments are all important for bolstering the U.S.’s broadband connectivity and thanked Congress for its efforts to address digital disparities.
• She also discussed how INCOMPAS member companies are making significant investments in their broadband networks.
  • She mentioned how the world’s largest technology companies have invested nearly $1 trillion in global digital infrastructure and indicated that technology companies are investing over $120 billion on this infrastructure each year.
• She noted that these investments are in addition to investments in online content, services, and applications.
  • She explained that these investments support the delivery of their own content, which drives higher demand for broadband and saves broadband providers over $5 billion each year.
• She asserted that the recent allocation of Congressional funding for broadband infrastructure did not diminish the USF’s necessity.
  • She noted that most of Congress’s recent broadband infrastructure funding is focused on deployment while three of the USF’s four programs are focused on broadband affordability.
• She stated however that policymakers must be responsible in their deployment of USF funds given how these funds come from U.S. taxpayers and fees imposed on customers.
  • She noted how there are certain USF programs that have overlapping goals with recent Congressional funding and called on the FCC to conduct a “deep dive” analysis into each USF program to find efficiencies.
  • She also thanked the Subcommittee for its launch of a Working Group to assess USF programs.
• She remarked that the USF is in “serious jeopardy” and noted how the decline in telecommunications revenues has caused the contribution factor to increase to around 30 percent (which is a historic high for the factor).
  • She noted that the contribution factor is predicted to rise to 40 percent by 2025 absent an intervention and commented that this rising contribution factor jeopardizes the USF’s stability.
• She discussed how the USF’s contribution base historically includes all of the services supported by the Fund and noted how this contribution base has not been modernized to include broadband services.
• She mentioned how INCOMPAS has been working with the USForward coalition to advocate for the expansion of the contribution base to include broadband internet revenues.
  • She noted how estimates have found that such an expansion would result in the contribution factor decreasing to less than 4 percent.

Mr. Daniel Lyons (Boston College Law School; American Enterprise Institute):

• He remarked that universal service has long been a “cornerstone” of U.S. telecommunications policy and called universal service increasingly important as more aspects of American life move online.
• He stated however that it is currently difficult to assess whether the USF is achieving its objectives.
• He remarked that it is especially difficult to assess the effectiveness of the Lifeline Program and noted how the FCC has never evaluated the effectiveness of this Program.
  • He mentioned how a recent independent audit could not conclude whether the Lifeline Program has improved access to voice and broadband services for low-income consumers.
• He stated that the Lifeline Program’s problems stem from its design and commented that there is no evidence indicating whether the program’s low subsidy amount would lead low-income families to purchase broadband internet services.
  • He also commented that the Lifeline Program’s eligibility requirements do not target households that lack broadband services.
• He remarked that the FCC’s failure to study the drivers of low-income broadband adoption rates prevents it from setting the optimal subsidy amount and recipient population.
  • He further commented that the Lifeline Program’s subsidy does not address other factors that lead low-income people to not adopt broadband internet services.
• He then stated that the ACP is superior to the Lifeline Program in several ways, including its allowance for Program recipients to choose which broadband internet plans they will purchase with the Program’s subsidy.
• He asserted however that the ACP has the same flaw as the Lifeline Program because there is no evidence that the ACP will actually improve broadband internet adoption rates.
  • He also noted how the ACP’s eligibility requirements are even broader that the Lifeline Program’s eligibility requirements.
  • He further mentioned how most ACP eligible families already possess broadband internet services, which means that federal taxpayers are being forced to subsidize households that are not at risk of losing their internet connectivity.
• He then remarked that the E-rate Program also suffers from a lack of evaluation and stated that the program had largely achieved its goal of connecting the U.S.’s libraries and schools.
  • He questioned whether and how additional spending on classroom technology can improve student learning outcomes and indicated that there exists “significant” debate in the educational community regarding this topic.
• He noted that the few studies that have examined the E-rate Program have found the Program’s spending had no measurable impact on student standardized test scores.
• He stated that the FCC possesses the requisite capability to perform the necessary analyses to make the Lifeline and E-rate Programs more efficient and effective through its Office of Economics and Analytics.
  • He commented however that the FCC appears to lack the will to perform these analyses.
• He then discussed how the FCC has used its CAF and Rural Digital Opportunity Fund (RDOF) to focus on upfront network construction costs.
  • He commented that these one-time investments are yielding sustainable network growth.
• He also stated that the FCC’s use of reverse auctions has helped to maximize the efficiency of broadband infrastructure deployment in unserved areas.
  • He called it important for the FCC to disburse broadband infrastructure funds on a technology neutral basis given the U.S.’s geographical diversity.
• He lastly remarked that the U.S. should reform the funding mechanism for the USF (which he called unsustainable) and recommended that the U.S. support the USF through the Congressional appropriations process.
  • He stated that having broadband providers fund the USF would constitute an underinclusive solution, encourage strategic behavior, and discourage the services that the Fund seeks to subsidize.
• He asserted that the using the Congressional appropriations process to support the USF will increase transparency and allow for greater Congressional oversight of the Fund.
  • He also stated that this approach would help to address the legal concerns surrounding Universal Service Administrative Company (USAC), which is a private administrator of a public funds scheme.

Mr. Denny Law (Golden West Telecommunications Cooperative):

• He discussed how Golden West Telecommunications Cooperative connects more than 32,000 locations across 24,500 square miles.
  • He indicated that the cooperative serves a geographic area greater than Maryland, New Jersey, Connecticut, and Delaware combined and with fewer than two customers per square mile.
• He remarked that his cooperative and other community-based providers have led efforts to deploy rural broadband services to rural areas.
  • He stated however that there remain customers in outlying rural areas that still need access to better broadband services.
• He further asserted that the U.S. must work to sustain and upgrade its broadband networks in rural areas to keep pace with demand and to ensure access to affordable services.
• He remarked that the construction of a new broadband network does not equate to the achievement of universal service.
  • He commented that universal service is an evolving and ongoing pursuit that requires continued focus.
• He stated that the USF has four comprehensive goals beyond broadband internet deployment.
  • He indicated that the first goal is availability and stated that the USF makes it financially feasible to deploy broadband internet services in rural areas.
  • He indicated that the second goal is capability and stated that the USF must support broadband infrastructure that can remain in operation for long periods of time.
  • He indicated that the third goal is affordability and stated that the USF helps to cover some of the difference in costs between serving urban and rural communities for broadband providers.
  • He indicated that the fourth goal is sustainability and stated that the USF seeks to ensure that customers remain connected to broadband internet services.
• He then discussed how Congress had explicitly directed the FCC to carry on the mission of universal service, even in the wake of “substantial” broadband grant funding.
• He remarked that the CAF BLS and ACAM initiatives (as well as the Alaska Plan) have all helped smaller providers to engage in rural broadband deployment efforts.
  • He recommended that the U.S. enhance and expand these efforts to address the U.S.’s remaining broadband availability challenges.
• He further stated that supporting the aforementioned programs is essential to sustain previously completed work and to ensure that service rates remain affordable.
  • He commented that completing upgrades to these programs will promote more effective coordination with the NTIA’s BEAD Program.
• He then remarked that the U.S. must address how it pays for the USF and stated that the contribution mechanism provides specific, predictable, and sufficient support for the Fund.
  • He asserted that the Congressional appropriations process is ill-suited for providing this type of support for the USF.
• He expressed support for the Reforming Broadband Connectivity Act of 2023, which directs the FCC to reform the USF contribution system within one year.
  • He also expressed support for the Funding Affordable Internet with Reliable (FAIR) Contributions Act, which would direct the FCC to study certain demands and costs for rural broadband networks.
• He remarked that the FCC should ensure that all that use or benefit from broadband networks will contribute to their availability, capability, affordability, and sustainability.
• He recommended that the FCC use existing authority to include broadband revenues within the USF’s contribution base.
  • He commented that this action would stabilize the contribution base and properly reflect that programs supporting broadband should in turn be supported by the broadband industry.
• He also recommended that the FCC should ensure that large internet-centric firms that rely depend on broadband networks contribute in an “equitable” and “non-discriminatory” way to support those networks.

Mr. Greg Guice (Public Knowledge):

• He commended Congress for its bipartisan work to advance the U.S.’s goal of achieving universal service.
  • He asserted however that more work remains to be done regarding this effort.
• He remarked that the FCC must work to achieve the goals it laid out in its Report on the Future of the Universal Service Fund.
  • He indicated that this Report called for the U.S. to promote universal broadband deployment, broadband affordability, broadband availability, and equitable access to broadband throughout the U.S.
• He then recounted how the Reagan administration had established the FCC’s Lifeline Program to connect low-income families to the telephone system because it had deemed access to telephone service crucial to participation in U.S. society and the economy.
  • He noted how the FCC has subsequently expanded the program to support mobile service and broadband internet services and has taken “concrete” steps to ensure the eligibility of program enrollees.
• He asserted however the Lifeline Program’s support amounts are insufficient.
• He also mentioned how Congress had established the ACP as part of the IIJA and explained that this Program provides a $30 per month subsidy to help low-income people access broadband internet services.
  • He called the ACP a “huge” success and noted how the Program serves over 17 million families.
  • He highlighted how the ACP enjoys broad bipartisan support across urban, suburban, and rural communities.
• He remarked that the ACP benefits all Americans through driving economic opportunities and reduces the costs of various services, including health care.
• He stated that the ACP can serve as a model for reforming the Lifeline Program and noted how the ACP provides expanded eligibility for support and helps to offset the current market price of broadband internet services.
  • He highlighted how the ACP expands opportunities for eligible providers so that low-income consumers have more choices and creates stability for low-income families.
• He remarked that the ACP seeks to address the main barrier to broadband internet adoption: the price of broadband internet.
  • He contended that low-income families will subscribe to broadband internet service plans if they have the opportunity to cover subscription costs.
• He then discussed how Congress has provided “significant” funding to reduce the cost of deploying broadband networks and emphasized that networks require people, equipment, maintenance, and upgrades.
  • He contended that the FCC’s CAF must continue to support these expenses.
• He also stated that the U.S. should use cost savings from USF programs to meet delayed public interest objectives, such as improving the disaster resilience of broadband networks.
  • He called on the FCC to initiate a proceeding to determine how to promote greater network resilience.
• He then discussed how the USF’s revenues are declining and highlighted how the USF’s contribution factor currently is around 30 percent.
• He called for the FCC to reform the USF’s contribution mechanism and to include broadband revenue in the USF’s contribution base.
  • He commented that this reform would lower the contribution factor to 4 percent, which could save consumers between $2.60 per month and $4.50 per month.

Congressional Question Period:

Subcommittee Chairman Ben Ray Luján (D-NM):

• Chairman Luján asked the witnesses to answer whether preserving the USF is important.
  • Mr. Chavez answered affirmatively. He stated that the USF is critical for providing his school district’s students with broadband internet connectivity and enabling these students to have similar educational opportunities to their peers across the U.S.
  • Ms. Kronenberg answered affirmatively.
  • Mr. Lyons answered affirmatively. He called it important for policymakers to study the USF to ensure that it is fulfilling its promises.
  • Mr. Law answered affirmatively.
  • Mr. Guice answered affirmatively.
• Chairman Luján then thanked Mr. Chavez for his efforts to expand broadband internet access to his school district’s students. He noted how Mr. Chavez’s school district’s graduation rate had increased from 70 percent in 2019 to 95 percent in 2021 and had experienced a doubling in its student population over the same period. He asked Mr. Chavez to indicate whether part of the increase in his school district’s graduation rate could be attributed to the FCC’s E-rate Program.
  • Mr. Chavez answered affirmatively. He also stated that ECF funding during the COVID-19 pandemic had enabled students to remain engaged in their educational work, even when they were off-campus. He commented that federal broadband funding has made a “huge impact” on his school district’s students.
• Chairman Luján then expressed interest in the FCC’s Rural Health Care Program and noted how the COVID-19 Public Health Emergency (PHE) will end on the day of the hearing. He stated that the Rural Health Care Program remains vital for ensuring that rural health care providers can serve their patients remotely. He asked Mr. Guice to discuss the importance of remote access to health care services (even as the U.S. emerges from the COVID-19 pandemic).
  • Mr. Guice discussed how rural and tribal areas of the U.S. are losing hospitals and health clinics and called telehealth a “lifeline” for enabling people in these areas to remain in their communities. He stated that telehealth constitutes a great tool for delivering health care both during and outside of pandemics. He added that telehealth can lead to savings for federal health care programs. He mentioned how the state of Alaska has been one of the largest recipients of the Rural Health Care Program and commented that the connectivity and affordability provided to Alaska through this Program has heavily benefited many of the state’s very remote tribal communities.
• Chairman Luján asked Mr. Guice to indicate whether there should be funding to expand broadband internet connectivity in the homes of patients based on the lessons learned from the COVID-19 pandemic. He stated that telehealth has been key to promoting mental health treatment and access.
  • Mr. Guice expressed support for such funding and commented that telehealth helps providers to ensure that their patients are not missing health care appointments. He noted how patients in rural areas might need to drive over 100 miles to see a specific provider. He commented that the ability to access these providers through telehealth would provide the patients with both cost and time savings.
• Chairman Luján then noted how many of INCOMPAS’s members provide broadband internet access to low-income customers. He indicated that some of these customers depend on the FCC’s Lifeline Program for connectivity or might forgo other necessities (such as healthy food) to afford their broadband internet plans. He asked Ms. Kronenberg to address how broadband internet affordability fits into the mission of universal service.
  • Ms. Kronenberg remarked that the U.S. must address broadband internet affordability. She noted how the USF currently encourages broadband internet affordability through several programs, including the Lifeline Program. She discussed how the Lifeline Program had originally been developed during the Reagan administration to subsidize voice call services and noted how the FCC has subsequently evolved this program over time. She stated however that the Lifeline Program has not been sufficient for ensuring that low-income consumers can access robust broadband internet services. She discussed how Congress had worked to address the Lifeline Program’s deficiencies during the COVID-19 pandemic through establishing the Emergency Broadband Benefit Program and the ACP. She stated that these programs have experienced high uptake rates and noted how almost 18 million U.S. households are participating in the ACP. She indicated that only 7 million U.S. households are participating in the Lifeline Program. She also noted that while 90 percent of the plans sponsored by the Lifeline Program involve mobile connectivity, she indicated that ACP beneficiaries are more likely to use home broadband internet services. She commented that these home broadband internet services tend to be more robust and faster. She warned that the ACP’s funding may run out by the first half of 2024 and called on Congress to provide additional funding for the Program.

Sen. Roger Wicker (R-MS):

• Sen. Wicker expressed interest in how the USF is being funded and whether its funding mechanism ought to be reformed. He noted how Meta, Alphabet, Apple, Amazon, Microsoft, and Netflix have accounted for over 56 percent of all global data traffic over the previous year. He further mentioned how Netflix, YouTube, Amazon Prime, Disney+-Hulu, and the Microsoft Xbox network have driven 75 percent of total broadband network traffic. He stated however that a disproportionate amount of the contributions to the USF come from landline phone users and commented that older Americans are more likely to have landlines. He asked the witnesses to indicate whether it is fair for older Americans to fund the USF at a disproportionate rate when so many people benefit from the Fund.
  • Mr. Guice remarked that the USF’s current contribution mechanism is burdening older Americans. He noted that the U.S. has not reformed the USF’s contribution mechanism to account for new technologies that have come online since its last update 17 years ago.
• Sen. Wicker interjected to ask Mr. Guice to recommend a solution for reforming the USF’s contribution mechanism.
  • Mr. Guice stated that broadband internet access service revenues should be included in the USF’s contribution base and indicated that this action would lower the current contribution factor from 30 percent to 4 percent. He commented that this would significantly reduce the USF fees paid by many older Americans with landline phone service pay.
  • Ms. Kronenberg remarked that the USF’s current contribution factor is “incredibly high.” She stated that INCOMPAS is working with other stakeholders to develop a contribution factor policy proposal. She remarked that the FCC can use this policy proposals to inform their efforts to reform the USF’s current contribution mechanism system. She expressed support for expanding the contribution base to include broadband internet revenues. She stated that the USF is largely being used to support the business case for broadband providers and affordable broadband internet service. She noted how the USF has historically been paid for based upon the services that it supports.
• Sen. Wicker interjected to ask Ms. Kronenberg to clarify whether the FCC could reform the USF’s current contribution mechanism system without new legislation.
  • Ms. Kronenberg stated that the FCC could reform the USF’s current contribution mechanism system without new legislation.
  • Mr. Lyons expressed agreement with Sen. Wicker’s concerns that the USF’s current funding mechanism is not sustainable. He stated however that expanding the contribution base would not address the USF’s structural problems. He warned that adding new providers to the USF’s contribution base could create incentives that will alter the functioning of the internet. He recommended that the U.S. fund the USF through the Congressional appropriations process and commented that this approach would subject the Fund to Congressional oversight.
  • Ms. Kronenberg noted how current law requires the FCC to have sufficient and predictable support for the USF. She stated that subjecting the USF to the Congressional appropriations process will likely necessitate changing the federal USF statute. She reiterated her call for the FCC to pursue reforms to the USF’s current contribution mechanism system.

Full Committee Chairman Maria Cantwell (D-WA):

• Chairman Cantwell noted how Public Knowledge had sent a letter to the FCC raising concerns regarding the Agency’s delay in issuing the 2.5 GHz spectrum licenses. She asked Mr. Guice to discuss how this delay impacts customers and the rollout of wireless broadband services.
  • Mr. Guice remarked that the FCC’s failure to issue its 2.5 GHz spectrum licenses will harm consumers. He noted how T-Mobile (who had won these spectrum licenses in an FCC spectrum auction) is relying upon the licenses to build out its 5G network in many small and rural markets. He also stated that these licenses would enable T-Mobile to better compete in very concentrated wireless markets.
• Chairman Cantwell asked Mr. Guice to confirm that the FCC’s delay in issuing the 2.5 GHz spectrum licenses is harming spectrum deployment efforts.
  • Mr. Guice answered affirmatively.
• Chairman Cantwell thanked Public Knowledge for its recent letter to the FCC on this topic. She then mentioned how the NTIA had indicated that it had received 235 applications for middle-mile broadband infrastructure grants and indicated that these applications had requested nearly $5.5 billion in funding. She mentioned how Congress is currently working to expand middle-mile broadband infrastructure and expressed support for these efforts. She noted how there are currently numerous partnerships between utilities and broadband providers to deploy middle-mile broadband infrastructure. She mentioned how she had introduced bipartisan legislation that would leverage the U.S.’s existing electricity grid to produce cost-efficient, resilient, and fireproof middle-mile broadband networks. She stated that this legislation would create thousands of jobs. She asked Mr. Guice to discuss the additional investments that the U.S. needs to open up middle-mile broadband infrastructure and to address how middle-mile broadband infrastructure could enable the faster deployment of broadband internet services.
  • Mr. Guice discussed how middle-mile broadband infrastructure is expensive and noted that the USF does not cover this infrastructure (except for in Alaska). He stated that middle-mile broadband infrastructure is key for deploying broadband internet services to rural and tribal areas. He commented that while he did not know exactly how much the U.S. should spend on middle-mile broadband infrastructure, he asserted that the U.S. should spend more on this infrastructure. He mentioned how Public Knowledge had supported Chairman Cantwell’s middle-mile broadband infrastructure legislation.
• Chairman Cantwell asked Mr. Guice to address how middle-mile broadband infrastructure could support broadband internet availability in urban areas.
  • Mr. Guice remarked that middle-mile broadband infrastructure is key to enable more providers to enter the broadband internet marketplace, which can lead to a more competitive U.S. broadband industry. He stated that while rural areas are more in need of federal support for middle-mile broadband infrastructure construction, he asserted that middle-mile broadband infrastructure remains important for urban areas.
• Chairman Cantwell asked Mr. Guice to discuss the broadband needs of urban areas.
  • Mr. Guice noted that there exists a popular perception that urban areas are fully connected to broadband internet services. He commented however that many parts of urban areas face broadband connectivity challenges. He noted how many lower income areas have older infrastructure and stated that this infrastructure must be upgraded.

Sen. J.D. Vance (R-OH):

• Sen. Vance remarked that the USF is not on a sustainable fiscal trajectory because its taxes an ever shrinking base of legacy technologies to subsidize the growth of newer and more popular technologies. He stated that this dynamic is causing Americans (especially older and lower income consumers) to pay more for phone service, even as the USF becomes less solvent. He remarked that Congress should consider substantial reforms to the USF and suggested that Congress provide the FCC with guidance to update and overhaul the USF’s “antiquated” funding scheme. He noted how FCC Commissioner Brendan Carr had proposed to tax large technology companies to pay for the USF. He called this proposal “common sense” and commented that these companies have been significant beneficiaries of the U.S.’s expanded broadband internet service. He asked Ms. Kronenberg and Mr. Lyons to indicate whether large technology companies would be justified in demanding that broadband providers carry their traffic in a neutral fashion if the large technology companies were to become greater funders of the USF. He stated that if large technology companies are required to pay for the USF, then these large technology companies should be expected to not discriminate against the various providers and the people that use the USF.
  • Ms. Kronenberg called it important to recognize the “significant” investments that large technology companies are making to support global internet connectivity. She highlighted how these companies invest in data centers, submarine communications cables, and the interconnection points with internet service providers (ISPs). She disputed the assertion that large technology companies are not paying into the system that supports global internet connectivity. She stated that the global internet connectivity investments from large technology companies do not receive support from the USF. She raised concerns that the proposals to have large technology companies help pay for the USF could have negative consequences. She noted how the FCC currently does not have authority over edge providers and stated that providing the FCC with such authority could result in unintended consequences. She also warned that such policies could delay USF reforms. She further remarked that many innovative services and applications are being delivered online and commented that these services and applications are driving consumer demand for broadband internet service. She stated that these services and applications are saving consumers money and identified video streaming as an example of these services. She raised concerns that a potential USF fee on video streamers could make it less attractive for customers to adopt video streaming services.
  • Mr. Lyons remarked that edge providers are not “free riding” on broadband networks and noted how these providers pay transit fees to the networks that carry their traffic through to consumers. He recounted how Comcast had changed the fees that it charged to Netflix around 2014 and noted how Netflix had responded to this move through creating its own private networks. He explained that Netflix had set up new data centers and routing patterns. He commented that Netflix’s response demonstrates how the imposition of new fees can result in unintended consequences for broadband networks. He stated that economics (rather than regulatory policy) would ideally drive reforms for broadband network structures.
• Sen. Vance acknowledged the concerns that proposals to have large technology companies help cover the USF could be underinclusive and expressed interest in working to improve upon these proposals. He expressed receptiveness to taking the fundamental structure of the USF’s traditional funding mechanism and applying it to new technologies.

Sen. Gary Peters (D-MI):

• Sen. Peters discussed how broadband networks require ongoing maintenance support beyond the deployment phase. He asked Mr. Law to address how ongoing maintenance of broadband networks is especially important in extremely rural and hard-to-build areas. He also asked Mr. Law to discuss the importance of having the USF maintain broadband network sustainability within these areas.
  • Mr. Law mentioned how his cooperative had a very low customer density of 1.5 customers per mile of network. He noted that this dynamic causes his cooperative to have higher maintenance costs and stated that there are no customer revenues to support these maintenance costs. He also discussed how there are components of the network that will need to be upgraded over the lifetime of the network and stated that rural areas cannot often cover these upgrade costs using their customer revenues. He remarked that the USF helps to address the aforementioned revenue shortfalls.
• Sen. Peters then mentioned how the U.S. Federal Bureau of Investigation (FBI), the U.S. Cybersecurity and Infrastructure Security Agency (CISA), and the Multi-State Information Sharing and Analysis Center (MS-ISAC) had recently released a joint cybersecurity advisory warning in September 2022 noting that a group known as the Vice Society is targeting the education sector with ransomware attacks. He added that these agencies had anticipated that these attacks would only increase. He also mentioned how a November 2022 ransomware attack had forced several Michigan schools to close for three days. He noted his efforts to pass the K-12 Cybersecurity Act of 2021 into law and explained that this legislation directs CISA to seek out solutions to the issue of cyberattacks against K-12 schools. He asked Mr. Chavez to discuss how his school has worked to address cybersecurity concerns. He also asked Mr. Chavez to identify potential areas where the federal government can support school districts with their cybersecurity needs.
  • Mr. Chavez mentioned how his school district has combated ransomware and other computer viruses with antivirus software. He noted how the E-rate Program has a rule that prevents school districts from using Program funds to purchase antivirus software. He stated that allowing school districts to use E-rate Program funds to purchase antivirus software would be beneficial.
• Sen. Peters then discussed how the ACP is set to run out of funding by the middle of 2024 and noted how almost 44 percent of eligible Michigan households are enrolled in the ACP. He highlighted how Detroit has one of the highest rates of ACP enrollment among metropolitan areas and attributed this high enrollment to the efforts of state agencies and local organizations. He asked Ms. Kronenberg to discuss how INCOMPAS’s members and underserved communities have benefited from the ACP. He also asked Ms. Kronenberg to indicate whether a sustainable USF could be used to help fund the ACP over the long-term.
  • Ms. Kronenberg remarked that INCOMPAS’s competitive network provider members are using the ACP to better meet their customer needs in their communities. She stated that these competitive network provider members have indicated that the ACP is providing them with a stream of revenue to help pay off their debts associated with their constructed networks. She also remarked that these competitive network provider members are considering how the ACP will interact with the Capital Projects Fund (CPF) and the BEAD Program. She then referenced a recent Boston Consulting Group study that found that the ACP reduces the necessary subsidy to deploy broadband infrastructure networks in rural areas by 25 percent per house. She noted how the U.S. currently spends $360 per year on the ACP on a per household basis. She stated that this constitutes a savings of $500 per location in deployment. She called on Congress to consider long-term funding solutions for the ACP and highlighted how the ACP is expected to run out of funding during the first half of 2024. She then remarked that it might be possible to combine the ACP into the USF system. She stated however that the FCC should first pursue USF contribution reform before it considers any proposals to combine the ACP into the USF system. She commented that the failure to first pursue USF contribution reform would lead to an “exponential” increase in the contribution factor. She further stated that Congress might need to address some legal issues surrounding the ACP if it seeks to combine the ACP into the USF system.

Sen. Jerry Moran (R-KS):

• Sen. Moran expressed interest in working to ensure that the U.S. does not engage in duplicative spending on broadband infrastructure across federal spending programs. He asked Mr. Law and Mr. Lyons to address whether federal departments and agencies are engaged in sufficient coordination to guard against duplicative broadband infrastructure spending.
  • Mr. Law commented that there could never be too much coordination across federal programs. He stated that issues continue to arise from different funding programs focused on broadband infrastructure deployment. He expressed hope that federal departments and agencies would engage in more coordination with regard to broadband infrastructure spending.
  • Mr. Lyons discussed how the U.S. had adopted a variety of broadband infrastructure programs since 2010 on a piecemeal basis and stated that these various programs have often faced coordination issues. He noted how there have been instances where two different providers have been subsidized to build broadband infrastructure in unserved areas simultaneously because each of the providers had received their own federal subsidies from different federal programs. He asserted that more coordination across federal departments and agencies is necessary to prevent this type of situation from reoccurring. He also raised concerns over the potential for competition between a subsidized broadband provider and an unsubsidized broadband provider within the same space.
• Sen. Moran expressed concerns that a single entity could receive duplicative funding from multiple federal programs. He stated that the U.S. has significant broadband infrastructure deployment needs and commented that duplicative broadband infrastructure spending undermines the U.S.’s ability to achieve universal service. He then mentioned how he had joined bipartisan efforts to encourage the FCC to pursue reforms to the USF’s contribution factor. He asked Mr. Lyons to discuss how the U.S.’s failure to stabilize the USF’s contribution factor will impact telecommunications providers and end users. He also asked Mr. Lyons to address whether the USF might eventually become obsolete because of increased federal investments in broadband infrastructure deployment. He commented however that this new broadband infrastructure will require ongoing maintenance.
  • Mr. Lyons remarked that there is consensus that the USF’s existing contribution mechanism is unsustainable. He noted how the USF’s contribution factor had been high five years ago and indicated that this factor had nearly doubled in the ensuing years. He stated that the hearing’s discussion had largely been focused on the USF’s contribution base. He recommended that policymakers focus more on ensuring that the USF’s spending is supporting programs that will address digital disparities.
• Sen. Moran then discussed how there are complaints regarding the costs associated with delivering broadband in rural areas. He asked Mr. Law to provide recommendations for updates to the CAF BLS and ACAM programs to address these delivery challenges.
  • Mr. Law applauded the FCC’s recent work to update the CAF BLS and ACAM programs. He recommended that the FCC update the ACAM Program’s speed requirements and noted how the ACAM Program had been based on a lower speed requirement when it had been initially deployed in 2018. He also stated that the U.S. should give providers that participate in the ACAM Program the opportunity for extended funding over a longer period in conjunction with an increased speed commitment over a broader area. He then discussed how the CAF BLS Program is subject to an annual budget control mechanism and asserted that the Program’s budget is too low. He suggested that the FCC update the budget for the CAF BLS Program. He commented however that the FCC could still maintain an annual budget control mechanism for the CAF BLS Program.

Sen. Jacky Rosen (D-NV):

• Sen. Rosen discussed her efforts to develop the ACP, which helps working families to access and afford critical broadband internet services and devices needed for work, school, and telehealth. She noted how over 201,000 Nevada households are currently enrolled in the ACP. She mentioned how she had recently led a letter to the U.S. Senate Committee on Appropriations requesting robust funding for the ACP in fiscal year (FY) 2024. She commented that this funding is critical for ensuring that her constituents (as well as over 17 million households across the U.S.) do not lose access to broadband internet services. She asked Ms. Kronenberg to discuss the importance of ensuring continued funding and support for the ACP. She also asked Ms. Kronenberg to identify lessons learned from the ACP’s implementation that can help the U.S. to improve other broadband affordability programs, such as the Lifeline Program.
  • Ms. Kronenberg first thanked Sen. Rosen for her commitment to the ACP and stated that the ACP enables INCOMPAS’s member companies to better serve all of their customers. She called it “vital” for the ACP to continue so that people do not lose their broadband internet services. She also discussed how the ACP provides an important stream of revenue to broadband internet providers that enables them to cover their debt payments associated with their broadband network construction. She further stated that the ACP would make these broadband internet providers more willing to participate in additional broadband infrastructure construction efforts using the CPF and BEAD Program. She referenced a study that found that it is “significantly” less expensive to build new broadband infrastructure when there is known customer demand for broadband service. She commented that the ACP provides customer demand for broadband service.
• Sen. Rosen called it important for the U.S. to maintain its various programs to promote broadband internet connectivity and expressed interest in ensuring that her state of Nevada will receive its “fair share” of federal broadband infrastructure funding (especially in its rural communities). She raised concerns that the BEAD Program’s funding may be distributed based on the FCC’s “flawed” broadband maps. She mentioned how she had introduced the bipartisan Accurate Map for Broadband Investment Act, which would provide the FCC with time to update its broadband maps before the NTIA allocates funding based on said maps. She also noted how the FCC’s broadband maps support the USF CAF and indicated that Nevada currently receives over $22 million from the USF’s CAF. She expressed concerns that the FCC’s “flawed” broadband maps might impact Nevada’s future CAF allocations. She asked Mr. Guice and Ms. Kronenberg to discuss how inaccurate broadband maps can impact the U.S.’s efforts to address digital disparities and prevent communities in need from receiving federal broadband infrastructure funding.
  • Mr. Guice remarked that Congress has provided “historic” funding to address gaps in broadband internet coverage and stated that inaccurate FCC broadband maps could cause many deserving communities to miss out on broadband funding opportunities. He discussed how the FCC has a challenge process that seeks to improve the accuracy of FCC broadband maps and noted that this process is meant to enable the NTIA to move forward on the BEAD Program by June 30, 2023. He suggested that the FCC be provided with flexibility to make some updates to their broadband maps after June 30, 2023. He called these updates “essential” for addressing current inaccuracies in the FCC’s broadband maps. He expressed hope that the FCC and the NTIA will continue to work together to increase the accuracy of current broadband maps.
• Sen. Rosen acknowledged that her question period time had expired and requested that Ms. Kronenberg provide her response to the question for the hearing’s record.

Subcommittee Ranking Member John Thune (R-SD):

• Ranking Member Thune discussed how Congress has allocated billions of dollars to multiple federal departments and agencies to support the buildout of broadband infrastructure. He indicated that these departments and agencies include the FCC, the NTIA, the U.S. Department of Agriculture (USDA), and the U.S. Department of the Treasury. He expressed concerns that many federal departments and agencies (including the NTIA) are including extraneous requirements (such as net neutrality, open access, and burdensome labor requirements) for their broadband programs. He mentioned how he had recently led an effort from Committee Republicans requesting that the NTIA remove the aforementioned requirements from the BEAD Program. He asked Mr. Law to discuss the role and mission of the USF’s CAF moving forward as other federal departments and agencies distribute their broadband infrastructure funding.
  • Mr. Law remarked that the USF serves as a backstop in rural America for providing reasonable, comparable, sufficient, and predictable broadband internet services. He predicted that the USF’s CAF would continue to support broadband sustainability and affordability programs moving forward, irrespective of the BEAD Program and other one-time broadband infrastructure funding programs.
• Ranking Member Thune also asked Mr. Law to discuss how extraneous requirements for federal broadband programs impact broadband providers (such as Golden West Telecommunications Cooperative). He asked Mr. Law to address whether these requirements impact whether his cooperative will apply for federal broadband infrastructure grants.
  • Mr. Law remarked that extraneous requirements for federal broadband programs will influence whether his cooperative will apply for federal broadband infrastructure grants. He stated that his cooperative faces challenges when seeking to comply with these extraneous requirements. He remarked that these extraneous requirements force his cooperative to either retain outside experts to comply with the requirements or to hire dedicated compliance staff. He commented that both approaches impose additional costs on his cooperative. He also remarked that these extraneous requirements are often very challenging to comply with, which can discourage smaller broadband providers from participating in federal broadband programs.
• Ranking Member Thune then noted how Mr. Lyons had raised concerns that the FCC has not developed metrics for determining whether its Lifeline Program is effective at delivering broadband internet services to low-income Americans. He stated that he had long called on the FCC to undertake a fundamental analysis of the Lifeline Program to assess the Program’s effectiveness. He asked Mr. Lyons to indicate whether the FCC had conducted an analysis on the Lifeline Program’s effectiveness at delivering broadband internet services to low-income Americans. He also asked Mr. Lyons to address how the absence of this analysis could undermine the U.S.’s efforts to reduce digital disparities.
  • Mr. Lyons stated that the FCC had not conducted an analysis on the Lifeline Program’s effectiveness at delivering broadband internet services to low-income Americans. He highlighted how the GAO has repeatedly asked the FCC to conduct such an analysis on the effectiveness of the Lifeline Program’s spending. He indicated that the FCC had found in a study that up to 88 percent of Lifeline Program funds had been spent on families that were not at any risk of losing their broadband internet service. He acknowledged that while this study had some problems, he stated that this study has found wasteful spending in the Lifeline Program. He elaborated that much of the Lifeline Program’s spending did not advance the goal of bolstering broadband adoption rates.
• Ranking Member Thune asked Mr. Lyons to indicate whether he is also concerned that the ACP has been ineffective at reducing digital disparities.
  • Mr. Lyons expressed concerns over the U.S.’s failure to study the effectiveness of the ACP in terms of delivering broadband internet services to low-income Americans. He noted how the ACP had even broader eligibility requirements than the Lifeline Program and indicated that families earning twice the federal poverty level (FPL) are eligible for the ACP. He mentioned how the Pew Research Center had found that 57 percent of families making under $35,000 per year have home broadband internet and that 76 percent of these families own a smartphone. He commented that these findings suggest that most eligible ACP funding recipients are already connected to broadband services. He also stated that the fact the ACP is running out of money suggests that the U.S. should consider making the ACP’s eligibility requirements stricter to ensure that ACP funds go to the most deserving recipients.

Sen. Jon Tester (D-MT):

• Sen. Tester discussed how his personal farm often experiences cellular service and broadband connectivity challenges and commented that these challenges persist, despite him spending a “fair amount” of money on broadband internet services. He mentioned how the IIJA had provided $65 billion for broadband infrastructure and indicated that the government would cover 75 percent of the law’s broadband infrastructure spending. He expressed support for this federal broadband infrastructure funding and asserted that broadband internet access has become an essential part of American life. He asked the witnesses to address why the U.S. currently has problems with cellular service and broadband connectivity given the federal government’s expenditures in this area.
  • Mr. Guice first remarked that the IIJA constitutes a “historic commitment” to ensuring that all Americans can access broadband internet services. He then discussed how many broadband markets are not very competitive and stated that the U.S. should work to address this lack of competition. He asserted that a more competitive broadband market would facilitate price competition, which would benefit consumers.
  • Ms. Kronenberg remarked that the U.S. should do more to promote broadband service competition as it funds new broadband networks. She recommended that the U.S. require broadband networks built using government funds to provide access to all broadband providers. She commented that this approach would bring better prices to retail customers, more innovation, and more community investment.
• Sen. Tester indicated that while many cellular phone carriers claim to cover his region, he asserted that only one cellular phone carrier could provide service to the region. He added that this cellular phone carrier’s service is not always reliable. He noted how there are claims that low orbiting satellites can furnish sufficient cellular service. He asked the witnesses to comment on the veracity of these claims.
  • Mr. Law remarked that low orbiting satellites can provide an option for connectivity in certain areas. He expressed doubts however that these satellites could serve as a reliable solution to connectivity challenges. He stated that it remains unclear as to how these satellites perform during periods of heightened demand and in adverse situations (such as bad weather). He also questioned the scalability of these satellites.

Sen. Deb Fischer (R-NE):

• Sen. Fischer mentioned how she had developed the IIJA’s Broadband Deployment Locations Map provision, which established a unified mapping tool for broadband funding. She explained that this Map’s purpose is to combine data and identify where each federal department and agency awards funds for broadband deployment projects. She indicated that these federal departments and agencies include the FCC, the NTIA, the USDA, and the U.S. Department of the Treasury. She stated that she is awaiting the FCC’s launch of the Broadband Deployment Locations Map and indicated that the deadline for this Map is next week. She asked Mr. Lyons to indicate whether the FCC’s Broadband Deployment Locations Map will be a critical tool for minimizing wasteful spending between different department and agency programs.
  • Mr. Lyons remarked that the U.S.’s lack of adequate broadband mapping has previously undermined efforts to create a comprehensive broadband deployment mechanism nationwide. He stated that there exists general support for broadband mapping efforts and commented that the challenges arise in the execution of these efforts. He expressed support for efforts to pursue broadband mapping initiatives.
• Sen. Fischer then noted how the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the American Rescue Plan Act of 2021 (ARPA), and the IIJA had appropriated tens of billions of dollars to support broadband infrastructure deployment. She asked Ms. Kronenberg to indicate whether interagency coordination through the FCC’s Broadband Deployment Locations Map would help to ensure that broadband infrastructure funding is being spent most efficiently.
  • Ms. Kronenberg answered affirmatively and thanked Sen. Fischer for her leadership on broadband map issues. She called it “critical” for the U.S. to have the ability to evaluate the areas that are receiving federal broadband infrastructure funding, the specific recipients of this funding, and which locations still need service. She recommended that the FCC’s Broadband Deployment Locations Map be overlaid with the FCC’s National Broadband Map that identifies unserved and underserved locations.
• Sen. Fischer expressed support for Ms. Kronenberg’s call to have the FCC’s Broadband Deployment Locations Map be overlaid with the FCC’s National Broadband Map. She stated that unserved areas should be prioritized as part of federal broadband infrastructure deployment efforts. She then asked Mr. Law to indicate whether the launch of the FCC’s Broadband Deployment Locations Map would reduce the risk that his cooperative’s networks could be overbuilt by the broadband programs of other federal departments and agencies.
  • Mr. Law answered affirmatively. He discussed how Golden West Telecommunications Cooperative is working on its construction plans for future years and stated that the cooperative could use the FCC’s Broadband Deployment Locations Map to identify federally funded broadband infrastructure projects that might be duplicative either now or in the future. He remarked that this transparency would enable federal broadband infrastructure programs and broadband providers to better focus their construction efforts on connecting unserved locations.
• Sen. Fischer expressed agreement with Mr. Law’s response. She highlighted how the USF makes “valuable” investments in broadband networks and in rural high-cost areas that would otherwise not receive commercial investments. She specifically discussed how the ACAM and the CAF BLS Programs are sustaining reliable broadband services in very rural areas. She asked Mr. Law to discuss how the FCC’s proposed rulemaking to extend support for the ACAM and the CAF BLS Programs will help preserve the USF’s investments into the future.
  • Mr. Law noted that the FCC’s proposed rulemaking would provide more updated broadband speed requirements for the ACAM and the CAF BLS Programs. He commented that these updated speed requirements would bring these Programs in line with other programs. He also stated that FCC’s proposed rulemaking would ensure the sustainability of the networks built and designed using funds from the ACAM and the CAF BLS Programs.

Sen. Ed Markey (D-MA):

• Sen. Markey discussed how he had authored the E-rate Program provisions of the Telecommunications Act of 1996 to ensure that all children will have internet connectivity. He commented that this Program had been effective in providing equitable access to the internet across income levels. He asked Mr. Guice to indicate whether the E-rate Program has been successful and constitutes a “critical” part of the USF.
  • Mr. Guice answered affirmatively.
• Sen. Markey also discussed how the COVID-19 pandemic had helped to expose the U.S.’s internet access challenges. He noted that the E-rate Program had helped students to connect to the internet in school and library settings, but not in home settings. He stated that millions of students had lacked the devices and internet access needed to continue their education during COVID-19 pandemic era school closures. He raised concerns that these education access challenges can leave the students ill-prepared for future career opportunities. He asked Mr. Chavez to indicate whether every American child should have internet connectivity so that they can receive a full education.
  • Mr. Chavez answered affirmatively.
• Sen. Markey mentioned how the U.S. Department of Education had recently released data showing that students with access to laptops and high-speed internet at home score higher on tests than their classmates without those resources. He noted how he had worked to establish the FCC’s ECF during the COVID-19 pandemic that has provided laptops, tablets, and internet services to 17 million students. He raised concerns that the funding for the ECF is quickly being depleted. He asked Mr. Guice to discuss how having the ECF run out of money would impact children.
  • Mr. Guice remarked that Congress had established the ECF to ensure that all students would have access to laptops, tablets, and internet services outside of their schools. He commented that the ECF had played a “necessary and vital” role during the COVID-19 pandemic. He stated that the U.S.’s experience with the ECF provides insights into how the U.S. should modernize the E-rate Program to better educate students and prepare them for the future job market.
• Sen. Markey expressed concerns that allowing the ECF to run out of money would pose both short-term and long-term harm to children’s learning. He called on the U.S. to provide additional funding for the ECF in the short-term. He also stated that policymakers must ensure that the USF effectively supports education in both home and school settings. He asked Mr. Guice to indicate whether any updates to the USF must protect and build upon the U.S.’s recent gains in student productivity.
  • Mr. Guice answered affirmatively.
• Sen. Markey further asserted that providing students with access to laptops, tablets, and internet services would be key to supporting the mental health of students. He also reiterated his assertion that this access would be key to promoting educational opportunities for children across income brackets.

Sen. Marsha Blackburn (R-TN):

• Sen. Blackburn expressed interest in how IIJA funds are being distributed to states for broadband infrastructure deployment. She noted how the U.S. had previously worked to distribute broadband grants to states through the Broadband Technology Opportunities Program (BTOP). She asserted that BTOP had operated as a “slush fund” and had failed to meaningfully address digital disparities. She asked Mr. Lyons to provide recommendations for ensuring that the IIJA’s distribution of federal broadband infrastructure funds would not repeat the U.S.’s experience with BTOP. She expressed interest in working to ensure that the IIJA funding recipients will not seek to obtain future money from the USF to cover the ongoing expenses related to their IIJA grants.
  • My Lyons remarked that U.S. policymakers must consider the design of the distribution mechanism for IIJA funds to ensure that U.S. taxpayer funds are being spent most efficiently. He stated that the U.S.’s experience with the CAF and RDOF Programs suggests that reverse auctions will increase the likelihood that broadband infrastructure build outs will best safeguard U.S. taxpayer funds. He also stated that the U.S. should work to ensure that any potential bidders in a broadband-related auction will possess the correct qualifications and can deliver on their promises. He remarked that the U.S. should promote policies that prioritize one-time build outs of broadband infrastructure. He suggested that the U.S. could accomplish this through requiring bidders to build a net-present value of their expected ongoing operational expenses into their initial subsidy requests.
• Sen. Blackburn then mentioned how the GAO had released a May 2022 report that provided an inventory of federal broadband programs. She noted how this GAO report had found 133 federal funding programs supporting broadband deployment and access across 15 different federal agencies. She also highlighted how the FCC alone had distributed $7 billion in 2022 for USF programs and indicated that $4 billion of this funding had gone to broadband network deployment in rural areas. She further mentioned how Congress had authorized more than $400 billion for broadband funding, including $42 billion for the BEAD Program. She asked Mr. Lyons to indicate whether U.S. policymakers should first assess its existing broadband funding programs before they commit additional federal funds into more broadband programs. She commented that many of her constituents are confused regarding which federal broadband programs they are eligible for and how they can use the funding from these various programs.
  • Mr. Lyons remarked that the U.S. should develop a mechanism for coordinating its broadband expenditures to guard against duplicative spending. He expressed concerns that duplicative federal spending on broadband projects could undermine the U.S.’s ability to achieve its universal broadband service goals.

Sen. Ed Markey (D-MA):

• Sen. Markey asked Mr. Guice to indicate whether the U.S.’s broadband internet investments will only be successful if the U.S. can ensure that the internet remains free and open with values of non-discrimination.
  • Mr. Guice answered affirmatively. He remarked that the internet must remain a free and open space for the exchange of ideas and asserted that this is premised on the values of non-discrimination. He commented that the FCC’s Title II authority helps to ensure that the internet will remain free and open.
• Sen. Markey then asked Mr. Chavez to discuss how the FCC’s E-rate Program and ECF had benefited his school district.
  • Mr. Chavez remarked that his school district would not have been able to connect its students to home broadband internet services without the ECF. He emphasized that the ECF had particularly benefited students of color during the COVID-19 pandemic.
• Sen. Markey asked Mr. Chavez to project the impact of allowing for the ECF to expire.
  • Mr. Chavez noted how the ECF had enabled his school district to provide high-speed internet access to all of its students and contended that the U.S. could not allow the funding for the ECF to run out. He stated that the ECF plays a key role in supporting the education of students.

Sen. Amy Klobuchar (D-MN):

• Sen. Klobuchar noted how the IIJA had included funding for the FCC’s ACP. She asked Mr. Guice to discuss the effectiveness of the ACP. She also asked Mr. Guice to address the importance of ensuring that the ACP does not run out of funding. She further asked Mr. Chavez to provide recommendations for improving digital inclusion (especially in rural and tribal communities).
  • Mr. Guice remarked that the ACP demonstrates that providing low-income families with support will enable these families to access broadband internet services. He commented that these services will provide these families with critical economic benefits. He noted how over 18 million U.S. households are participating in the ACP. He called the ACP a “victim of its own success” and warned that strong demand for the ACP will cause it to prematurely run out of funding.
  • Mr. Chavez recounted how Navajo tribal leaders had expressed concerns that the U.S. might abruptly end its federal broadband programs. He called it critical for the U.S. to provide sustained ACP funding and stated that ACP funding is key to providing broadband services to tribal areas. He further asserted that the ACP enables his school district to have the same educational opportunities as other parts of the U.S.
• Sen. Klobuchar then noted how over 9,000 rural hospitals and clinics use the FCC’s Rural Health Care Program. She asked Ms. Kronenberg to discuss the importance of the Rural Health Care Program.
  • Ms. Kronenberg remarked that rural hospitals and clinics are in “dire” need of being able to reach their patients through telehealth. She stated that the FCC’s Rural Health Care Program helps these rural health care providers meet the needs of their patients. She warned that a reduction in Rural Health Care Program funding would force rural hospitals and clinics to find new funding sources, which she commented would be very difficult. She also stated that the Rural Health Care Program and the E-rate Program help to spur competition among broadband providers, which can lead to lower prices.
• Sen. Klobuchar also asked Ms. Kronenberg to indicate whether the U.S.’s current 911 infrastructure is in “dire” need of modernization. She mentioned how she had proposed legislation to upgrade this infrastructure.
  • Ms. Kronenberg expressed agreement with Sen. Klobuchar’s view that the U.S.’s current 911 infrastructure requires modernization. She stated that the U.S. must be able to fund evolving networks and their evolving equipment needs.
• Sen. Klobuchar then mentioned how she had worked on bipartisan legislation to require updates to federal broadband maps that show where broadband providers currently serve, where broadband providers have received federal, state, and local funding to construct broadband infrastructure, and when broadband infrastructure construction is expected to be completed. She asked Mr. Law to discuss the importance of having accurate broadband map information.
  • Mr. Law remarked that broadband network infrastructure construction involves a multiyear process. He discussed how Golden West Telecommunications Cooperative is participating in the ACAM Program and has committed to building out new broadband infrastructure through 2028. He stated that the failure of government programs to ask their recipients about their broadband infrastructure construction plans could result in duplicative spending across multiple programs.

Sen. Cynthia Lummis (R-WY):

• Sen. Lummis discussed how the FCC’s CAF has been essential for making the business case for voice and broadband services in rural areas of Wyoming. She asked Mr. Law to discuss the unique permitting challenges that Golden West Telecommunications Cooperative faces when operating in a Western state.
  • Mr. Law discussed how his state of South Dakota is like Wyoming in that it has a large amount of land owned by the federal government. He stated that this large amount of federally owned land can serve as a significant barrier to deploying broadband services in rural areas. He remarked that the Committee should review the federal permitting process for broadband infrastructure projects. He recommended that the Committee consider imposing a “shot clock” on federal agencies to review broadband infrastructure projects involving a previously disturbed right of way. He also stated that federal agencies ought to designate within themselves the proper points of contact for handling permitting issues. He commented that this designation will streamline the process that entities must undergo to receive the necessary permits for broadband infrastructure projects. He further stated that Congress should be more prescriptive in its laws governing the federal permitting process and not merely provide guidelines and suggestions to federal agencies.
• Sen. Lummis also noted how many Americans that remain unconnected to broadband services reside in very remote locations. She commented that it can be very difficult to deploy broadband infrastructure to these remote locations due to geographical challenges. She asked Mr. Law to discuss the difficulties associated with connecting very remote locations to broadband services. She also asked Mr. Law to indicate whether the CAF and other federal broadband programs currently prevent broadband providers from deploying broadband services to very remote areas.
  • Mr. Law remarked that the CAF, ACAM Program, and the Alaska Plan do a “great job” in terms of helping to make it economically feasible to deploy broadband services to many rural areas. He discussed how the CAF BLS Program currently faces budget constraints and asserted that the FCC should work to address these constraints. He expressed his appreciation for the FCC’s use of budget control mechanism waivers in previous years. He asserted however that the continued use of these waivers does not constitute an optimal long-term strategy. He then remarked that the FCC should increase the speed targets and the length of the term of the commitments for the ACAM Program and the Alaska Plan. He stated that these changes would make broadband carriers more willing to pursue ambitious broadband infrastructure projects that would penetrate very rural areas.