FCC at the Fiber Network Alliance

Yesterday, (June 14, 2017) Federal Communications Commission (FCC) Commissioner Mignon Clyburn and Nick Degani, Senior Counsel to FCC Chair, Ajit Pai, spoke at the Fiber Network Alliance conference in Buford, GA. The Fiber Network Alliance (FNA) is an alliance of 24 broadband providers and telephone companies whom primarily provide services to underserved rural areas. The combined networks of the FNA members connect 28 states and have over 70,000 fiber network miles. The fact that two FCC representatives spoke at the Fiber Network Alliance on the same day indicates the significance of this group.

Most of the member companies of the FNA are small, relatively unknown and located in rural areas. However, the work they do is critical to one of the FCC’s highest priorities - expanding broadband service to rural areas that have been neglected by the big operators. Specifically, members of the FNA are leading the way on four (listed below) of the six priorities defined in the FCC’s #Solutions2020 initiative.

  • Ensure Affordable Communications
    Most FNA members are not incumbent Local Exchange Carriers (ILECs). They are offering their communities a new competitive choice for broadband communications.

  • Empowering Communities
    A significant portion of the FNA members are rural governments that have started their own fiber initiatives since their communities are underserved by the larger telephone companies.

  • Broadband as a Driver of Improved Health Services
    Rural hospitals and schools are critical anchor customers that drive the successful business deployments for most FNA members. FNA members are making telemedicine in rural areas a reality.

  • 5G and Beyond for All Americans
    The vision of 5G wireless in rural areas requires backhaul from remote towers to the broadband network. 5G wireless in rural areas will be impossible without the rural fiber network that is being deployed by companies like those in the FNA.

Both FCC officials touted the billions of dollars that are being allocated by the Connect America Fund (CAF) and the alternative Connect America model (A-CAM) as FCC policies that are promoting broadband in rural America. However, the discussion yesterday between FCC officials and FNA members revealed a major irony. Few, if any, of the FNA members are benefitting from the subsidies of these FCC programs. Either FNA members do not qualify or the application burden is too high for small rural broadband operators. The subsidies from these programs primarily go to ILECs or large telephone companies that do not have a local stake in rural communities and compete with most FNA members. In addition, FNA members noted that the 17% Universal Service Fund (USF) contribution requirement is a regulatory obstacle for delivering broadband to rural subscribers.

Perhaps the best public policy for encouraging the expansion of rural broadband is to eliminate the USF contribution requirement and Connect America subsidies. Local broadband entrepreneurs, such as those in the FNA, would be better able to serve their rural communities if regulation was not an obstacle that benefitted their competitors.