US Sen. John Thune (R-SD) yesterday blasted the Federal Communications Commission, saying it has failed to prevent budget cuts in funding for rural broadband.
“It has been more than a year since Chairman [Ajit] Pai” and fellow commissioners appeared before the Senate Commerce Committee “and committed to conducting a thorough economic analysis of the impact of USF [Universal Service Fund] funding cuts on broadband deployment in rural areas before allowing any further reduction,” Thune said.
But Pai’s FCC has failed to keep that promise, Thune said while delivering a statement at a hearing on rural broadband. Thune, the Commerce Committee chairman, continued:
Since that time, however, the cuts resulting from the FCC’s budget control mechanism have increased by almost 25 percent. 25 percent!
There has been no economic analysis of what these cuts are doing to rural America—what they are doing to rural jobs, rural economic development, and the ability to live and learn, work, and play in communities like Pierre, South Dakota or Ocean Pointe, Hawaii; Yankton, South Dakota or Yakima, Washington.
The FCC has not conducted an analysis of what insufficient and unpredictable funding is doing to the companies trying to deploy broadband under some of the most difficult circumstances in America. This is simply unacceptable.
“These cuts could cause providers to halt or cancel broadband buildout, reducing the availability of broadband throughout rural America,” Thune also said. “This could also cause an increase to the cost of service to those who already receive service, putting at risk investments already made.”
Thune and other Republican lawmakers have generally been strong supporters of Pai’s deregulatory policies.
Budget limits hinder deployment
Pai says he is planning changes that will fix the budget shortfall, but it’s not clear why his FCC hasn’t done the economic analysis Thune referred to. As chairman, Pai has promised to “strengthen the role of economics at the FCC.”
The cuts Thune complained about have affected the USF’s multi-billion-dollar High Cost program, also known as the Connect America Fund, which gives money to carriers to deploy broadband in areas without it. The FCC instituted a new budget control mechanism in 2016 under then-Chairman Tom Wheeler. The mechanism is apparently having unwelcome effects that Thune says Pai has not stopped.
The program budget “has remained static at 2011 levels,” and “the current budget limits are hindering rural broadband deployment and harming consumers,” Thune and other South Dakota lawmakers wrote in a letter to Pai on Wednesday. In South Dakota, carriers face an $11 million cut over 12 months unless the FCC takes action, they wrote.
Minnesota carriers are facing a $7.6 million funding cut over 12 months, Sen. Amy Klobuchar (D-Minn.) said at the hearing. She described constituents who lack proper telecom access, including a doctor who has to go to a McDonald’s parking lot to use Wi-Fi for emergency calls because he has no signal at home. “This shouldn’t be happening in the United States of America in the year 2018,” she said.
FCC data shows that more than 24 million Americans lack access to high-speed broadband at home, Klobuchar also noted.
Pai deflects blame, promises fix
A spokesperson for Pai blamed the previous administration in a statement to Multichannel News.
“Chairman Thune is right that the last Administration’s budget control mechanism has stymied efforts to close the digital divide in rural America,” Pai’s spokesperson said.
But Pai has been the FCC chairman since January 2017, and his spokesperson’s statement did not address Thune’s criticism that the FCC failed to do any economic analysis of the cuts over the past year-plus. We asked Pai’s office for a direct response to Thune’s criticism and will update this story if we get a response.
The Pai spokesperson also told Multichannel News that “Chairman Pai led his colleagues earlier this year to devote an additional $500 million to small, rural carriers that serve their communities.”
That FCC order included “$180 million in one-time funding to mitigate the effect of the budget control mechanism for the current funding year adopted by the prior Commission,” Pai said at the time.
The problem could be fixed for good within months. Pai’s spokesperson told Multichannel News that later this year, he plans to establish a “sufficient and predictable budget so that those in rural communities are not left behind any longer.”
Separately, Pai has repeatedly imposed new limits on Lifeline, another Universal Service Fund program that gives telecom subsidies to poor people. The Universal Service Fund is paid for by US residents through surcharges on phone bills.
Thune’s criticism of the FCC was not limited to the Universal Service Fund. He also took aim at the FCC’s broadband mapping data, which is widely known to be inaccurate.
“Our current maps are insufficient,” Thune said. “Without accurate maps, we cannot build out broadband to truly unserved areas.”
While senators regularly hold FCC oversight hearings with all commissioners present, the witnesses at yesterday’s hearing were from broadband providers and not the FCC. Pai thus didn’t have a chance to respond directly to Thune at the hearing.
UPDATE: The FCC responded to Ars, but just gave us the same statement given to Multichannel News and said that “the Chairman hopes to resolve the budget issue by the end of the year.” The FCC order that added $500 million of funding also asked the public for comment “on whether the budget should be adjusted, among other issues,” the FCC said.