With Details Scarce, Questions Remain on Pai's Proposed Rural Digital Opportunity Fund
Questions continue about a $20.4 billion Rural Digital Opportunity Fund (RDOF) proposed in a Friday speech at the White House by FCC Chairman Ajit Pai (see 1904120065) and whether it will have much effect on closing the digital divide. Pai said the program would connect up to 4 million rural homes and small businesses to high-speed internet. Critics said the FCC appears to be rebranding the Connect America Fund, without any new proposed spending. Some hope the FCC won’t dig into funding for Lifeline and other USF programs.
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The process for launching the new program “will start this year, and we anticipate holding the reverse auction next year,” an FCC spokesperson said. "This is a different program. Among other things, funds will be distributed in a different manner, and the program will be geared towards providing higher-speed broadband."
“The numbers add up to be about what we spend on CAF, plus what we expect to have left over from Mobility Fund, so there is no reason to tap Lifeline or the other programs,” said Public Knowledge Senior Vice President Harold Feld. “Given this chairman's consistent efforts to undermine the other USF programs, it does not do for anyone who cares about funding Lifeline or E-Rate to breathe a sigh of relief just yet.” The details matter, Feld said: “We will have to see when the chairman releases more details how they intended to reach the $20 billion over 10 years.”
“It's safe to assume the FCC thinks the new program will be better in at least some way, but it's not yet clear exactly how,” said Tom Struble, technology policy manager at the R Street Institute. “The FCC will have to go through notice and comment before the new program can be implemented, so the specific details of the new program should become clear in the next 12 months, but I could see that panning out in a number of different ways.”
RDOF may end up being a repackaged CAF, which is a repackaged USF high-cost fund, Struble said. “That would be good, but not revolutionary or groundbreaking,” he said. The FCC may have broader revisions in mind, he said. Last year, the FCC launched a rural healthcare pilot that is "slightly different” from the USF rural healthcare program, he said. “It seems like they're already rethinking how USF can support rural healthcare, and now they're rethinking how USF can support rural broadband, too. If this is a trend, a reexamination of the other two USF programs, E-rate and Lifeline, may be coming down the pike next.”
John Heitmann of Kelley Drye, counsel to the National Lifeline Association, said the FCC may be looking at a real shift to more spending on 5G. But the FCC must also protect Lifeline, Heitmann said: “Too many in rural and nonrural areas cannot afford access to available broadband networks.”
The FCC needs to continue fine-tuning the Lifeline national verifier and application program interface (API) while in “soft launch,” Heitmann said. “Without a carrier API solution, robust database access and other fixes in place, [the Universal Service Administrative Co.’s] continuing announcements of hard launches does little more than to shut the door on the poor,” he said. “It’s been two months since USAC hit the pause button so that it could assess and adjust some aspects of the launch. Now service providers are growing anxious as time continues to pass without confirmation that real progress is being made.”
“What raises questions about USF is the proposal to cap the programs, which will pit low income Americans and schools and libraries against rural residents,” said Georgetown Law Institute for Technology Law & Policy Fellow Gigi Sohn.
The new program seems like a repackaged CAF, said Free Press General Counsel Matt Wood. Pai’s staff “would know better -- if they are done hanging out with the totally non-staged and wholly authentic workers trooped into the White House to serve as a backdrop to sell this seeming snake oil,” Wood emailed.
Other observers said the FCC could be poised to make some important changes to the USF.
Giving an old program a new name “happens all the time in Washington,” said Free State Foundation President Randolph May. “What’s important, though, are the key elements of the program. It looks like the RDOF will be technology neutral, that it will focus disbursements on unserved areas, and that it will employ reverse auctions to realize the benefit of competitive bidding for funds. If it ensures these elements are implemented, at least the program will be more market-oriented.” May said he also hopes to see “transparency in the disbursements for purposes of accountability.”
“Even if it's a repackaging, it is still important that we update the program to align with current challenges,” said Doug Brake, Information Technology and Innovation Foundation director-broadband and spectrum policy. “This gives an opportunity to identify changes to be made to the CAF process and its goals. I just hope it doesn’t sap momentum for a potential legislative package that could accelerate rural deployment or reform the contribution mechanism.”