FCC's Open Internet Order seen as a net gain for rural America

WASHINGTON, April 14, 2015 – Will rural areas eventually receive the same type of high-speed Internet access that many of their urban “cousins” enjoy? The answer to the question is still in dispute as service providers and their federal regulators duke it out in the courts over controversial new rules.

The Federal Communications Commission (FCC) published its final rule on net neutrality in the Federal Register on Monday, legally barring both big and small broadband providers from undermining the “open Internet” by offering paid prioritization, blocking web content or throttling — speeding up or slowing down the Internet.

The order also reclassified broadband providers as “common carriers” under Title II of the Telecommunications Act, which some stakeholders, most notably 142 broadband companies and the American Cable Association (ACA), say creates an overly burdensome regulatory framework for small and rural Internet service providers (ISPs) to comply with.

On Tuesday, telecommunications giant AT&T and the largest trade associations in the industry – the National Cable & Telecommunications Association, CTIA-The Wireless Association, and ACA – filed separate lawsuits challenging the order, alleging the FCC “usurped” Congress’ authority.

Others, like Shirley Bloomfield, CEO of the NTCA - Rural Broadband Association (NTCA-RBA), say the rule will support small wireless utilities, like the 900 rural telecommunications NTCA-RBA represents, and provide enhanced broadband access in the rural communities they service.

“You need to have rules” in the transport and transmission of data, Bloomfield said. “Years ago, communications networks were kind of the ‘wild, wild West.’” With reclassification, the industry has one rulebook that applies to all providers, big and small, that “ensures the networks in this country are seamless, transparent, and non-discriminatory (and) that consumers are treated equally regardless of where they live.”

In addition to enhancing network connectivity – a foundational element of rural broadband expansion – the plan, by reclassification under Title II will create regulatory certainty in the industry, Bloomfield said, which encourages private investment.

The order’s regulatory “touch” is decidedly “lighter” than Title II’s regulation of telecommunications firms, said FCC Chairman Tom Wheeler. In fact, it “forbears” – that is, refrains – from imposing more than half of Title II’s provisions on wireless providers, including requirements that would have regulated broadband rates or forced carriers to comply with burdensome and costly administrative filing requirements.

One aspect of the new rule would work against rural broadband expansion. This “forbearance” would allow ISPs to hold back contributions to a so-called Universal Service Fund (USF) until the Federal-State Joint Board on Universal Service (Joint Board) makes a recommendation to the FCC on how USF contributions should be assessed.

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Brad Ramsey, general counsel for the National Association of Regulatory Utility Commissioners, sits on the Joint Board. He said he was not surprised that the board missed the April 7 deadline to make a recommendation.

Ramsey was also skeptical broadband companies would be forced to contribute to the USF in the near future. “There is zero chance it (the broadband industry) will get assessed within two years and I would be shocked and surprised if it (an assessment) happened within three years,” he added.

Bloomfield said USF assessments on broadband companies are “only fair” and help “create a broadband future for everyone in this country, regardless of where they live.”

“My guys (NTCA-RBA member providers) already serve and live in (rural) communities so they are invested – (we’re talking about) their neighbors, their children, and their schools,” Bloomfield said. “That universal service support is their link to ensuring that they can bring their communities into the 21^st century.”

While the order remains in legal limbo, the FCC will support universal service through the Connect America Fund (CAF). The CAF, created in 2011 and most recently modified to include faster Internet speeds in December 2014, subsidizes ISPs that offer high-speed Internet (download speeds of 10 Mbps – megabits per second -- or higher) in rural and under-served communities that would not otherwise have access. According to the commission, CAF could expand access to over 5 million rural Americans.

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