FCC Modifies Lifeline Rules

The FCC released new rules for the Lifeline program in November. These rules will make it harder for some companies to participate in the program, but it opens up the door to many new participants.

The FCC has obsessed for years about fraud in the program. There are numerous cases over the years of the program providing Lifeline subsidies to people who are no longer eligible or who even died. However, a lot of that blame has to placed on the FCC. Carriers have never had any ways to know if Lifeline participant gets a job and is no longer were eligible, or even if the eligible family member dies and the subsidy continues to go to the household. The FCC has finally taken the steps to fix such problems through the creation of the National Lifeline Eligibility Verifier – a database updated monthly by government agencies that provide the support that makes participants eligible.

The following new rules are lifted directly from the FCC, which says the new rules will improve the program by:

  • Prohibiting participating carriers from paying commissions to employees or sales agents based on the number of consumers who apply for or are enrolled in the Lifeline program
  • Requiring participating carriers’ employees or sales agents involved in enrollment to register with the program administrator, the Universal Service Administrative Co. (USAC)
  • Strengthening prohibitions barring Lifeline providers from claiming “subscribers” that are deceased
  • Taking additional steps to better identify duplicate subscribers, prevent reimbursement for fictitious subscribers, and better target carrier audits to identify potential FCC rule violations
  • Increasing transparency by posting aggregate subscribership data, including data broken out at the county level, on USAC’s website
  • Increasing transparency with states by directing USAC to share information regarding suspicious activity with state officials
  • Restoring the states’ traditional role of designating carriers to participate in the Lifeline program.

One of the requirements is somewhat unusual in that ISPs need to identify those employees responsible for enrolling participants in the Lifeline plan. For most ISPs, that’s going to be the customer service staff. The requirement is a headscratcher because it’s hard to conceive of any possible good way that the FCC can use this information.

The last bullet point highlights an opportunity for ISPs that want to participate in the program. For the last several years it’s been exceedingly difficult for an ISP to enter the Lifeline program. During that same period, we’ve seen big telcos like AT&T withdraw from the plan in most of the states where they operate.

An ISP that wants to offer a low-price broadband product for low-income households can collect the Lifeline subsidy to offset price discounts. For example, an ISP could offer a low-income broadband connection and collect $20 from a customer and also collect the $9.25 Lifeline subsidy from the Universal Service Fund. The Lifeline funds are paid directly to the ISP from the Universal Service Fund.

More importantly, ISPs now can apply to become eligible for Lifeline with state regulators rather than from the FCC – which has been blocking new applications for several years. There is a particularly good opportunity for tribal ISPs since the Lifeline subsidy on tribal lands can be as high as $34.25 per qualified recipient.

Enrolling in the Lifeline program is another tool to help ISPs attack the homework gap. ISPs can use the subsidy to provide lower price broadband to qualifying homes with school students. If an ISP serves customers that qualify for a discount, it’s hard to justify not joining the program and giving such customers a break on rates.

T-Mobile Offering Broadband Solutions

As part of the push to get approval for the proposed merger with Sprint, T-Mobile pledged that it will offer low-cost data plans, give free 5G to first responders and provide free broadband access to underserved households with school students. These offers are all dependent upon regulators and the states approving the merger.

The low-price broadband plans might be attractive to those who don’t use a lot of cellular data. The lowest-price plan offers 2 GB of data for $15 monthly. The price is guaranteed for 5 years and the data cap grows by 500 MB per year to reach 4 GB in the fifth year. The second plan offers 5 GB for $25 and also grows by 500 Mb per year to reach 7 GB by the fifth year. I assume adding voice and texting is extra.

The offer for free phones for first responders is just that. T-Mobile will offer free voice, texting, and data to first responders for 10 years. There will be no throttling of data and data will always get priority. The company estimates that this would save $7.7 billion nationwide for first responders over the ten years if they all switch to T-Mobile. Not surprisingly the other carriers are already unhappy with this offer, particularly AT&T which is busy building the nationwide FirstNet first responder network. This may be a somewhat hollow offer. The FirstNet network has some major advantages such as automatically interconnecting responders from different jurisdictions. But at least some local governments are going to be attracted to free cellular service.

The offer for school students is intriguing. For the next five years, the company is offering 100 GB per month of downloaded data to eligible student households. The company will also provide a free WiFi hotspot that converts the cellular data into WiFi for home use. T-Mobile estimates that roughly 10 million households would be eligible. Studies have shown that cost is the reason that many homes with students don’t have home broadband. In urban areas, the T-Mobile effort could largely eliminate the homework gap, at least for five years. That would give the country five years to find a more permanent solution. While T-Mobile would also help in rural America, many rural homes are not in range of a T-Mobile tower capable of delivering enough broadband to be meaningful. However, in many cases, this offer would be bringing broadband for homework to homes with no other broadband alternatives.

If the merger goes through, T-Mobile plans to mobilize the big inventory of 2.5 GHz spectrum owned by Sprint as well as activating 600 MHz spectrum. These are interesting spectrum, particularly the 600 MHz. This spectrum is great at penetrating buildings and can reach deep into most buildings. The spectrum also carries far, up to 10 miles from a transmitter. However, compared to higher frequencies, the 600 MHz spectrum won’t carry as much data. Further, data speeds decrease with distance from a cell sites and the data speeds past a few miles are likely to be pretty slow.

This plan makes me wonder how allowing millions of students onto the cellular network for homework will affect cell sites. Will some cell sites bog down when kids are all connected to the school networks to do homework?

I further wonder if the promise to offer free broadband to students also comes with a promise to supply enough backhaul bandwidth to poor neighborhoods to support the busy networks. Without good backhaul, the free bandwidth might be unusable at peak hours. I don’t mean to denigrate an offer that might mean a broadband solution for millions of kids – but I’ve also learned over the years that free doesn’t always mean good.

I’ve seen where a few states like New York are still against the merger, so there is no guarantee it’s going to happen. It sounds like the courts will have to decide. I suspect these offers will be withdrawn if the decision is made by courts rather than by the states.

NFL City Broadband

Every few years a large city takes a hard look at the broadband issue and considers building a citywide fiber network to make their city more competitive. A few years ago, San Francisco took a hard look at the issue. Before then, cities like Seattle, Baltimore, Cleveland, and others considered fiber networks.

The latest city that might be joining the fray is Denver where fiber proponents are pushing the City Council to have a 2020 ballot initiative for removing statewide restrictions on municipal participation in finding fiber solutions. Numerous smaller communities in Colorado have already held ballot initiatives that allowed their cities to opt-out of the restriction. Some of those cities have gone on to build fiber networks and others are now studying the issue.

If such a ballot initiative passed it would not necessarily mean that Denver would be considering building a fiber network. Instead, this would remove the restrictions created by a law sponsored by the big incumbent telephone and cable companies that requires a referendum before a city can even have a serious conversation about fiber.

A lot of people probably wonder why a large city would consider building a fiber network. It turns out that many cities have sizable pockets without adequate broadband. There are places in every big city where the cable companies never provided service – often to apartment buildings in poor neighborhoods. I’ve written several blogs about studies that show that AT&T redlined DSL deployment and that numerous poor neighborhoods still can only get DSL with speeds of 3 Mbps or less. I can’t remember any more who made the estimate, but I recall a paper published six or seven years ago that estimated that there were as many people in cities with no good broadband option as there are in rural America.

Even where cities have broadband, the big cities still have digital deserts where whole neighborhoods barely subscribe to broadband because of cost. The city of Buffalo, NY identified that the city has a huge homework gap and found that many students there didn’t have broadband. After some investigation, the city found that there were numerous neighborhoods where only 30 – 40% of residents could afford broadband. Buffalo has begun a program to provide free home WiFi for students, with the first deployment to cover 5,500 homes.

There have been several recent studies that have shown that affordability has become the number one reason why homes don’t have broadband. That issue is about to intensify as all of the big cable companies are starting to raise broadband rates annually. The big cable companies are also tamping down on special pricing that lets many homes get broadband for an affordable rate for a few years. Cities are recognizing that they have to find ways to solve the digital divide because they can see a huge difference between neighborhoods with and without broadband.

No NFL city has yet tackled building a fiber network to everybody, and perhaps none of them ever will. Building a fiber network of that magnitude is expensive and cities like San Francisco and Seattle got estimates of price tags over $1 billion to provide fiber everywhere. All big cities also already have some neighborhoods with fiber, making it harder to justify building fiber everywhere.

However, every big city has neighborhoods with poor broadband options and neighborhoods suffering from a huge homework gap and digital divide because of affordability. I expect more cities are going to tackle initiatives like the one undertaken in Buffalo to find ways to get broadband to those who can’t afford big-ISP prices.

Many cities are restricted from taking a serious look at broadband solutions because of statewide legal restrictions. The Colorado legislation that requires a referendum just to consider a broadband solution is typical of these laws. There are twenty-two states with some sort of restriction on municipal broadband which is intended to stop the cities in those states from looking for solutions.

The bottom line is that the only solutions for the digital divide and the homework gap are going to have to come locally. And that means that cities must be free to look for broadband solutions for neighborhoods that lack broadband options. There have been enough studies that demonstrate that students without home broadband underperform those with broadband in the home. I have no idea if the City Council in Denver is willing to at least tackle the ballot initiative to allow them to talk about the issue – but if they don’t, then their poorer neighborhoods are doomed to remain at a huge disadvantage to the rest the city.

A New National Broadband Plan?

Christopher Terry recently published an article for the Benton Institute that details how the National Broadband Plan has failed. This plan was initiated by Congress in 2009, which instructed the FCC to develop a plan to make sure that every American had access to broadband within a decade. The article details the many spectacular ways that the plan has failed.

In my opinion, the National Broadband Plan never had the slightest chance of success because it didn’t have any teeth. Congress authorized the creation of the plan as a way for politicians to show that they were pro-broadband. The plan wasn’t much more than a big showy public relations stunt. Congress makes symbolic votes all of the time and this was just another gesture that demonstrated that Congress cared about broadband and that also served to quiet broadband proponents for a few years. If Congress cared about broadband they would have followed up the plan with a vote to force the FCC to implement at least some aspects of the plan.

I have no doubt that those who worked to develop the plan are likely offended by my post-mortem of the effort. I know that several people who worked on the plan still prominently display that fact in their resume a decade later. I’m sure that working on the plan was an exhilarating process, but at the end of the day, the effort must be measured in terms of success. The folks that created the plan and the rest of the country were duped by the FCC.

The FCC never had the slightest interest in adopting the big recommendations of the plan. There is probably no better evidence of this when the Tom Wheeler FCC awarded $11 billion to the big telcos in the CAF II process – an award that couldn’t have been more antithetical to the National Broadband Plan. To those that follow FCC dockets, there are dozens of examples over the last decade where the FCC sided with big carriers instead of siding with better rural broadband.

The fact is that the US government doesn’t do well with grandiose plans and lofty long-term goals. Government agencies like the FCC mostly implement things that are mandated by Congress – and even then they often do the bare minimum. Even without the National Broadband Plan, the FCC already has a Congressional mandate to make certain that rural broadband is equivalent to urban broadband – and we annually see them do a song and dance to show how they are complying with this mandate while they instead largely ignore it.

This is not to say that broadband plans are generically bad. For example, the state of Minnesota developed its own set of broadband goals, with the most prominent goal of defining broadband in the state as connections of at least 100 Mbps. The state has implemented that goal when awarding broadband grants, and unlike the FCC, the state has awarded grant funding to build real rural broadband solutions. They’ve refused to spend money on technologies that deliver speeds that the state doesn’t consider as broadband.

I fully expect to hear a plea to develop a new plan and I hope that most of the folks who are working for better broadband ignore any such effort. Compared to ten years ago there are now a lot of organizations working for better broadband. Hundreds of rural communities have created citizen broadband committees looking for a local solution. There are county governments all over the country making grants to help lure ISPs to serve their county. Statewide groups are working to solve the digital divide and the homework gap. There are a lot of people actively advocating for real broadband solutions.

These advocates don’t need a national goal document to tell them what they want. By now, communities understand good broadband in the simplest form – it’s something their community either has or doesn’t have. Communities now understand the digital divide and the homework gap. Wasting federal dollars to create a new National Broadband Plan wouldn’t move any community one inch closer to better broadband, and I hope we resist the temptation to go down that path.

Welcome, Merit Network!

The rural broadband community has a new ally in Merit Network of Michigan. Merit Network is a non-profit network that is governed by Michigan’s public universities. The organizations was founded in 1966 and was an early player that helped to develop some of the practice and protocols still used on the Internet. Their early mission was to seek ways for universities to network together, something that they accomplished by connecting Michigan and Michigan State in 1971. Merit went on to manage NSFNET, a nationwide network sponsored by the National Science Foundation, that was used to connect advance research labs and universities.

Over time, the company also collaborated with the Internet 2 project but also turned its attention to Michigan where it cobbled together a network comprised or owned and leased fibers used to provide bandwidth to K-12 schools around the state.

In the last year, Merit decided to further expand their mission. They now see that the biggest problem in Michigan education is the lack of home broadband for students. 70% of the teachers in Michigan assign computer-based homework, and yet 380,000 homes in Michigan don’t have a broadband connection. They are convinced, like many of us, that this homework gap is creating permanent harm and disadvantaging students without broadband.

The organization recently held their first statewide broadband summit and invited communities, service providers, anchor institutions, and broadband ‘activists’ to attend the summit. I’m pleased to have been invited to be a speaker. The goal of the conference was to describe the homework gap and to talk about real solutions for solving the problem in the state. The summit hoped to bring together stakeholders in rural broadband to form alliances to tackle the problem.

Merit has also taken several extraordinary steps that is going to make them a major player in the national effort to solve the homework gap. They’ve undertaken what they call Michigan Moonshot. This is an intensive effort to map and understand the availability of broadband around the state. The effort is being undertaken in collaboration with M-Lab and the Quello Center of Michigan State University. The concept is to encourage state educators to get students to take a specific speed test and to pair that effort with a program that teaches students about gathering scientific data.

The Moonshot effort is also going to correlate student test scores with broadband availability. This will be done in such a way as to guarantee student anonymity. This has been done before, but not on such a large scale. The project solicited participation from several school districts in Spring 2019 but expects to include many more in the future. The results of the data collection will be analyzed by scientists at Michigan State. The results of Moonshot studies should be of interest to educators and rural broadband proponents all over the country. Preliminary results show that it’s likely that there will be a strong measurable negative impact for students without home broadband. This study will provide peer-reviewed statistical evidence of that impact and should be a useful tool to educate legislators and to goad communities into action to find a broadband solution.

Merit is also nearing completion of a lengthy document they call the Michigan Moonshot Broadband Framework, which they hope will be a living document (meaning that collaborators can make edits) that lays forth a guide for communities that want to find a local broadband solution. This document is a step-by-step roadmap for how a community can tackle the lack of broadband.

It’s always good to have another major player in the national battle to tackle the lack of household broadband. I have high hopes that Merit Network will spur finding broadband solutions for rural and urban students in Michigan.

Buffalo Providing WiFi to Student Homes

Buffalo New York is facing the same homework gap that most school systems are seeing. The city had spent millions of dollars to upgrade broadband to bring computer technology into the classroom but now has numerous students unable to use a digital curriculum due to not having broadband at their homes. Like everywhere else, the city sees that students without home broadband lag behind everybody else.

The City recently decided to tackle a portion of the homework gap and has approved building a WiFi network that will reach the homes of 5,500 students living in downtown Buffalo. They have approved a $1.3 million project to construct a wireless network that will extend the bandwidth available at the schools to surrounding neighborhoods.

Buffalo has what it calls digital deserts, with neighborhoods where more than half of households have no Internet access. This contrasts sharply with other parts of the city and with Erie County as a whole, where 80% of all households are online (with that statistic is depressed by including the digital deserts). The richest parts of the city have neighborhoods with nearly 90% broadband coverage, while there is one neighborhood in downtown with only a 31% household broadband penetration. The WiFi project is targeting two neighborhoods on the east side of downtown where the neighborhoods collectively have only a 40% broadband penetration.

The city is mounting antennas on top of eight downtown schools and other government-owned buildings. These installations take advantage of the gigabit bandwidth already available at City buildings. The network is being designed to reach students living within about two miles of each of the locations. For now, this first trial covers perhaps 5% of the total area of the city but covers neighborhoods with some of the highest needs in terms of students without home broadband.

Students will be able to log onto the school network using the same login used at school. The broadband connection will be limited to access the school network and is not intended to provide normal household broadband. The network will allow students into the highly controlled and curated school network that gives students access schoolwork, school-sponsored video and some access to the web for homework research.

Having access to a computer or tablet is the other half of the homework gap problem. Homes without broadband likely also don’t have computers. The city is working on a plan to let students take home laptops. Last year only seniors were able to take home school laptops, but in this coming year that is being expanded to all high school students in some schools. The city is exploring how to provide devices to students in grades 3 to 8.

Like other school systems, the city understands that smartphones are not the answer. While many students have smartphones, the devices are inadequate for doing homework, and students that try to wade through homework with smartphones fall behind from the frustration of using a small screen for big-screen applications.

Affordability is the main barrier to broadband in many households. In downtown Buffalo, there are three broadband options. The most affordable package from Charter, the incumbent cable company is $64.99. Verizon offers a slow low-price DSL option at $29.99, but this connection is too slow to connect to the school network to do homework. There is also an ISP, BarrierFree, that offers $100 broadband for businesses.

The city is also exploring free citywide WiFi that would bring broadband to everybody, not just to students. There is no easy answer to the homework gap, but perhaps Buffalo’s start is a model that can be explored by others. Recently the Government Accounting Office recommended that the FCC study the idea of using Schools and Libraries funds from the Universal Service Funds to reach students at home. If that fund can help pay for this kind of application, perhaps we can solve the homework gap neighborhood by neighborhood.

GAO Supports Broadband to Students

In an interesting move, the General Accounting Office released a paper that suggests that the FCC should expand the use of E-Rate funding to allow wireless connections to student homes. The E-Rate program is one of the major components of the Universal Service Fund. Today the E-Rate program can be used to construct fiber assets to reach schools or to subsidize fast broadband connections to schools that demonstrate the financial need.

Specifically, the GAO “recommended that the FCC assess and report on the potential benefits, costs, and challenges of making wireless access off school grounds eligible for E-rate.” The GAO recommendation went on to discuss the impact of the homework gap that puts students without home broadband at risk for falling behind their peers.

I’m sure that every rural broadband advocate understands this issue and applauds the GAO for making this suggestion. However, this seems extraordinary coming from the GAO and seems outside of their stated scope and function. The GAO is the internal auditor of the US government and is often called the congressional watchdog agency that examines how taxpayer dollars are spent. The GAO routinely provides reports to Congress with ideas on how the government can save money and work more efficiently.

I may have missed it, but I can’t remember the agency ever making policy suggestions of this magnitude to the FCC in the past. This seems like a particularly puzzling recommendation because it’s a suggestion on how to spend existing E-Rate money in a different way rather than suggesting ways for the FCC to save money.

The GAO report does a great job of describing the homework gap. The report discusses challenges that school-age children face in doing homework without a computer. The GAO found that many homes without home broadband rely on cellular connectivity, which is largely inadequate for doing homework. The report points out the shortcoming and challenges on the following chart for the alternatives to home broadband such as libraries, community centers, coffee shops, and outdoor WiFi around schools.

The GAO looked into six pilot projects at schools that tried to alleviate the homework gap using wireless technology to connect to students. The GAO pointed out that in 2016 that two schools asked for FCC waivers in the E-Rate program to provide wireless connectivity to students, but the FCC never reacted to the waiver requests.

The GAO concludes the report by recommending that the FCC take steps to assess and publish the potential benefits, costs, and challenges of making off-premises wireless access eligible for E-rate support. The has already FCC agreed with GAO’s recommendation, so I’m sure there will be an assessment coming in the near-future.

The Homework Gap

There are numerous studies and also mountains of anecdotal evidence from teachers that students without home broadband lag in academic performance compared to students with home broadband. This problem has come to be called the homework gap.

In a recent article, the Associated Press estimated that 17% of students – 3 million students – don’t have a computer at home. The estimate is that 18% don’t have broadband at home. That same article referenced a major study performed by the National Center for Education Statistics (NCES), an agency inside of the US Department of Education. That study compared test scores for 8th grade students both with and without a home computer. The results showed:

  • On tests of reading comprehension, students who have a computer at home had an average score of 268 compared to a score of 247 for students without a computer.
  • In testing for mathematics, students with a computer at home scored 285, while those without score 262.
  • In testing science, students with a computer scored 156 compared to 136 for students without a computer.
  • In testing competency in information and communication technology, students with a home computer scores 152, compared to 128 for students without a home computer.

The NCES also gathered statistics from around the world and they found that in 34 out of 37 countries that students with a home computer outperformed students without a computer in mathematics.

It’s not easy to gather this data. Student populations change every school year. There are also numerous kids in gray areas. For example, there are many students trying to do homework on smartphones – somewhere between having a home computer and not. There are also temporary broadband solutions such as school systems and libraries that lend hot spots to some students.

I’ve worked with several school systems that provide laptops or tablets to all students and then struggle with having to deal with rural students that don’t have a home broadband connection. NCES reports that teachers often modify their curriculum to not disadvantage students without home broadband – literally dumbing down courses for everybody to account for the fact that some students don’t have home broadband.

The homework gap is a problem because other studies have shown that lagging behind in school carries over into adult life. For example, students that lag in school drop out of school at a much higher rate and enroll in college at a much lower rate. Other studies have shown that students that don’t finish high school or enroll in college earn significantly less over a lifetime than students that graduate and/or get at least some college.

When rural communities come to me looking for a broadband solution, the homework gap is often the number one issue. Parents often have to make extraordinary efforts to find access to broadband – such as driving to town nightly to sit outside of hotspots. These parents are among the most vocal proponents for broadband. I’ve found that in rural communities the support for getting broadband for students run deep. My consulting company conducts surveys, and in rural communities we find nearly universal support for finding a local solution for the homework gap.

NCES is worried that the homework gap is growing as more school systems migrate their curriculum online. It’s getting harder for schools to try to accommodate students without broadband or home computers. As a country we pay a lot of lip service to the topic of finding a rural broadband solution – politicians and regulators seem to talk about it non-stop. But if we don’t find a solution there is one thing we know for sure – those 3 million students are not going to do perform as well as everybody else – and that’s a problem that affects all of us. We have to do better.

2.5 GHz – Spectrum for Homework

As part of the effort to free up mid-band spectrum, the FCC is taking a fresh look at the 2.5 GHz spectrum band. This band of spectrum is divided into 33 channels; the lower 16 channels are designated as EBS (Educational Broadband Service) with the remainder as BRS (Broadcast Radio Service).

The EBS band was first granted to educational institutions in 1963 under the designation ITFS (Instructional Television Fixed Service) and was used to transmit educational videos within school systems. It became clear that many schools were not using the spectrum and the FCC gave schools the authority to lease excess capacity on the spectrum for commercial use. In urban markets the spectrum was leased to networks like HBO, Showtime and the Movie Channel which used the spectrum to delivery content after the end of the school day. In the late 1990s the spectrum was combined with MMDS in an attempt to create a wireless cable TV product, but this use of the spectrum never gained commercial traction.

In 1998 the FCC allowed cellular companies to use the leased spectrum for the new 3G cellular. In 1998 the FCC also stopped issuing new licenses for the spectrum band. Companies like Craig McCaw’s Clearwire leased the spectrum to deliver competitive cellular service in many urban areas. In 2005 the FCC cemented this use to allow the spectrum to be used for two-way mobile and fixed data.

Today the technology has improved to the point where the spectrum could help to solve the homework gap in much of rural America. The spectrum can be used in small rural towns to create hot spots that are tied directly to school servers. The spectrum can also be beamed for about 6 miles from tall towers to reach remote students. The spectrum has nearly the same operating characteristics as the nearby 2.4 GHz WiFi band, meaning that long-distance connections require line-of-sight, so the spectrum is more useful is areas with wide-open vistas than in places like Appalachia.

A group of educational organizations including the Catholic Technology Network, the National EBS Association, the Wireless Communications Association International and the Hispanic Information and Telecommunications Network petitioned the FCC to expand the EBS network and to grant new EBS licenses to fully cover the country. The FCC has been considering a plan that would strengthen the educational use of the spectrum and which would also auction the rest of the spectrum for use as wireless broadband.

The use of the spectrum for rural educational uses could be transformational. Rural students could get a small dish at their homes, like is done with the fixed wireless deployed by WISPs. Students would them have a direct connection to the school systems servers for doing homework. Interestingly, this would not provide a home with regular Internet access, other than what might be granted by schools for links needed for doing homework.

The disposition of the spectrum band is complicated by the fact that Sprint holds much of the spectrum under long-term lease. Sprint holds licenses to use more than 150 MHz of the spectrum in the top 100 markets in the country, which currently provides them with enough spectrum to simultaneously support both 4G LTE and 5G. The speculation is that the FCC is working on a plan to free up some of this spectrum as a condition to the merger of Sprint and T-Mobile.

This is the only current spectrum band where the FCC is envisioning different urban and rural uses, with rural parts of the country able to use the spectrum to connect to students while in urban areas the spectrum is used to support 5G. This divided use was only made possible by the historic educational component of the spectrum. If the FCC tries to give all of this spectrum to the cellular carriers they’d have to reclaim the 2,200 licenses already given to school systems – something they are politically unwilling to tackle.

However, this solution points to a wider solution for rural residential broadband. The FCC could order the same type of rural/urban bifurcation for many other bands of spectrum that are used primarily in urban settings. We need to find creative ways to use idle spectrum, and this spectrum bank provides a roadmap that ought to be applied to other swaths of spectrum.

Freeing the spectrum for full use by rural education offers big potential, but also creates challenges for rural school systems which will have to find the money to build and deploy wireless networks for homework. But solving the rural homework gap is compelling and I’m sure many school districts will tackle the issue with gusto.

Is the Lifeline Program in Danger?

FCC_New_LogoOne has to ask if the FCC’s Lifeline program is in trouble. First, within the last month 80 carriers have asked to be relieved from participating in the program. This includes many of the largest ISPs / telcos and includes AT&T, Verizon, CenturyLink, Charter, Cox, Frontier, Fairpoint, Windstream and Cincinnati Bell. There are a lot of wireless companies on the list and it’s easier to understand why they might not want to participate. The rest of the list is filled out with smaller telcos and some fiber overbuilders.

These companies easily represent more than half of all the telephone customers and a significant percentage of data customers in the country. If these companies don’t participate in the Lifeline program then it’s not going to be available to a large portion of the country. The purpose of the Lifeline program is to provide assistance to low-income households to buy telecom services. It’s hard to see how the program can be sustained with such a reduced participation.

Originally the program was used only to subsidize landline telephone service. For the las few years it also has been available to cover cellphone service as an alternative to a landline. The most recent changes expand the definition to also allow the plan to cover broadband connections, with the caveat that only one service can be subsidized per household. While it’s not yet official, one can foresee that ultimately it will be used to subsidize only broadband and that coverage of telephones will eventually disappear.

The coverage that the new Lifeline provides for cellular data is a mystery. The plan covers 3G data connections and allows the providers to cap such services at a measly 500 megabytes of total downloaded per month. This seems to be in direct opposition to the stated goal of the Lifeline program to provide support to close the ‘homework gap’.

I also foresee larger problems looming for the entire Universal Service Fund program, of which Lifeline is one component. It’s already clear that the new administration is going to remake the FCC to be a weaker regulatory body. At a minimum the new FCC will reverse many of the regulations affecting the large telcos and cable companies.

But there is a bigger threat in that there are many in Congress that have been calling for years for the abolishment of the FCC and for scattering their responsibilities to other parts of the government. This could be done during budget appropriations or by including it in a new Telecom Act.

The opponents of the FCC in Congress have also specifically railed against the Lifeline program for years. There was a huge furor a few years ago about the so-called Obamaphones, where carriers were supposedly giving smartphones to customers, all paid for by the government. It turns out those claims were false. The only plan that was anywhere close to this was a plan from SafeLink Wireless. They used the Lifeline subsidy to provide eligible low-income households with a cheap flip-phone that came with one-hour of free calling plus voice mail. This very minimalist telephone connection gave people a way to have a phone number to use while hunting for a job and to connect with social services. But there were no Lifeline plans that provided smartphones to low income households like was portrayed by many opponents of the Lifeline program.

But rightly or wrongly, there are now a number of opponents to the Lifeline program, and that means that the plan could be a target for those trying to trim back the FCC. It’s going to be a lot harder to defend the Lifeline program if none of the major carriers are participating in it. There certainly will be a lot of changes made in the coming year at the FCC, and my gut tells me that programs like Lifeline could be on the chopping block if the big players in the industry don’t support it. If nothing else, the big ISPs would prefer to have funds allocated to Lifeline today to be re-purposed for something that benefits them more directly.

Note:  In an interesting development the FCC just rejected a petition from the NTCA and the WTA that asked that small companies be excused from some provisions of the Lifeline order. The FCC ruling basically says that any small company that is receiving high cost support and that offers a standalone data product must accept requests from customers who want to participate in the Lifeline Program. I am sure that this is not the end of the story and there will be more back and forth on the issue.