Senate Passes Farm Bill On December 14th, the Senate passed its version of the Farm Bill, which contains a reauthorization of the RUS broadband loan program. It also contained a state grant program to encourage broadband service, commonly referred to as the Connect the Nation Act. Under the legislation passed by the Senate, an RUS broadband loan program borrower would have to provide service to at least 25 percent of the households in a rural area that do not have access to terrestrial broadband and agree to complete build-out within three years. Borrowers would not be required to provide more than 10 percent of the loan amount in equity and would be exempt from a market survey if they do not intend to serve more than 20 percent of the broadband market. The Connect the Nation Act would provide grants to non-profit entities at the state level to map broadband availability and to ensure that “all citizens and businesses in States have access to affordable and reliable broadband.” $40 million would be authorized for this program over the next five years. The House passed its Farm Bill this past summer and must reconcile the differences with the Senate in conference. The text of the Senate Farm Bill should be available online at: http://agriculture.senate.gov/ Senate Commerce Committee Holds Broadband Hearing The Senate Commerce Committee held a hearing on Tuesday, April 24th, entitled “Communications, Broadband and Competitiveness: How Does the U.S. Measure Up?” The focus of the hearing was how the U.S. compares with other countries in broadband deployment and how the government can help facilitate broadband deployment. Commerce Committee members in attendance were Chairman Inouye (HI), Stevens (AK), Dorgan (ND), Smith (OR), McCaskill (MO), Klobuchar (MN), and Thune (SD). The witnesses included: Mr. Brian Mefford - President and CEO, ConnectKentucky and Connected Nation; Mr. Ben Scott - Policy Director, Free Press; Dr. Jeffrey A. Eisenach - Chairman, Criterion Economics, L.L.C., Adjunct Professor, George Mason University School of Law; Dr. Scott Wallsten - Senior Fellow and Director of Communications Policy Studies, Progress and Freedom Foundation; Dr. Adam T. Drobat - Chief Technology Officer and President of Advanced Technology Solutions, Telcordia Technologies and Advisor to the Board, Communications Research, TIA; Dr. Jack K. Wolf - Professor, University of California at San Diego Vice President, Technology, QUALCOMM Inc. Chairman Inouye started off the hearing by announcing he’s planning on introducing two bills related to broadband deployment. The Broadband Data Development Act would work to improve broadband data collection at both the federal and state levels. The Advanced Information and Communications Technology Research Act “will promote innovation and improve our commitment to basic research on information and communications technology here in the U.S.” Two of the major topics of discussion at the hearing were the most recent OECD rankings on broadband access, which had the U.S. dropping from 12th in the world to 15th, and the lack of data about broadband deployment in the U.S. In general, the witnesses and Senators lamented this development, but Dr. Eisenach disagreed and said we shouldn’t worry that much. Most countries go through an “S-curve” of broadband deployment, with a slow beginning, followed by fast growth, and then a leveling off. Some countries are simply ahead of others along this curve for different reasons, but the U.S. will catch up. Several witnesses criticized the FCC definition of broadband as well as their data collection method that counts residents of an area having access to broadband as long as one person in the zip code does. Senator Stevens asked the witnesses whether USF is essential to broadband deployment. They agreed it is essential. Mr. Scott told the Committee that broadband should be a covered service under USF. Dr. Eisenach agreed and added that we’re “wasting” limited USF dollars by designating multiple wireless ETCs in each study area when some areas go without broadband. He noted there are 16 wireless ETCs in Mississippi as an example of this waste. Senator Smith asked how other countries solved the problem of net neutrality and who built the networks abroad. Mr. Scott answered that the carriers built the networks and they currently maintain them with little state support. Senator McCaskill asked about how best to reform the RUS broadband program, citing the recent article in the Washington Post about RUS funding service in suburban Houston. She questioned whether we should create new government programs to encourage broadband deployment if the current one doesn’t work well. She recommended reforming RUS before creating new initiatives. The witnesses agreed that the RUS broadband loan program could use some reform, but cautioned against writing it off just yet. Dr. Wolfe recommended greater government funding of research on communications technology and suggested an Advanced Telecommunications Research Agency, along the lines of DARPA. Dr. Wallsten disagreed, saying the government needs to make more spectrum available and that the market is working well and the OECD rankings mean very little. Witness testimony can be found here: http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=1853 Source: Western Telecommunications Alliance Newsletter House Telecom Subcommittee Hearing on International Broadband Deployment The House Energy and Commerce Committee’s Subcommittee on Telecommunications and the Internet held a hearing on April 24th titled, “Digital Future of the United States: Part IV, Broadband from Abroad”. The intent of the hearing was to learn how other countries are deploying high-speed broadband throughout their countries. Interestingly enough, the hearing coincided with the recent release of the Organization for Economic Cooperation Development’s (OECD) rankings on broadband deployment in which the United States fell to 15th from among the 30 industrialized countries that make up the OECD’s membership. The United States’ previous ranking was 12th. The hearing was well attended by members on both sides of the aisle (e.g., Democrats and Republicans). Members present included: Mr. Markey (MA); Mr. Upton (MI); Ms. Harmon (CA); Ms. Eshoo (CA); Mr. Barton (TX); Ms. Solis (CA); Mr. Terry (NE); Mr. Doyle (PA); Mr. Shimkus (IL); Mr. Hill (IN); Ms. Capps (CA); Mr. Gonzales (TX); Mr. Hastert (IL); Mr. Walden (OR); Mr. Pickering (MS); and Mr. Sterns (FL). The panelists were: The Honorable Paul Swain, Member of Parliament from New Zealand. His testimony focused on New Zealand’s efforts to unbundle local loops and how the unbundling of services is leading to better investment and deployment of broadband. Mr. Greg Wyler is the Director and Co-Founder of Rawandatel in Africa. His testimony touched on broadband in developing nations and the need for industry to help provide the infrastructure required for broadband deployment. He also touched on how broadband is changing the lives of people in developing countries. He said most people in Africa have broadband access via satellite, but the cost and download speeds are problematic. Mr. Ed Richards is the CEO of OFCOM (similar to our FCC) in London. Testimony focused on the UK’s re-invigorated market environment as being reason for UK’s broadband penetration going from 39/100 to 50/100. Also talked about functional separation which allows sectors of a company to separate from parent company to provide certain services but still be owned by the parent company. Mr. Shin Hashimoto is the EVP, Director of the Next Generation Network Office for Nippon Telegraph and Telephone Corporation (NTT) in Japan. He touched on the nearly 7 million Japanese who get broadband service via fiber-to-the-home. He also indicated NTT is able to provide 100 MB service for about $46. Said most of their next generation network will be integrated into their existing network. Mr. George Ford, Chief Economist and Editorial Advisory Board Member at the Phoenix Center said that US must develop broadband policy to keep pace with rest of the world. He encouraged Congress to think deeper on what it want the policy to be and not just rise in the rankings. He mentioned resources should be spent on making sure there’s ubiquitous deployment of broadband. Each of the witnesses’ testimony can be viewed at the following website: http://energycommerce.house.gov/cmte_mtgs/110-ti-hrg.042407.dig.future.partIV.shtml Each member expressed concern with the United States’ drop in the rankings for broadband deployment. The Democrats focused a great deal of their comments on the poor implementation of the 96 Act and how that prevented the deployment of new technologies and higher broadband speeds. The Republicans outlined many of the actions the Commission has taken in the past year to shape a less regulatory broadband world (e.g., classifying broadband as an information service). They also tended to focus on the fact that the OECD’s formula for determining rankings wasn’t quite accurate because it didn’t take into consideration special access lines that business use to provide broadband. Both parties agreed that the United States must make broadband a priority in order for the country to remain an economic powerhouse and world leader in innovation. Some of the more provocative statements were delivered by Mr. Terry (Nebraska) where he indicated the US needed an actual inventory of who’s providing broadband and to what percentage of the population. He relayed a story of a small butcher shop in western Nebraska that’s been able to go from 3 employees a few years ago to over 50 recently because the company is using broadband to sell its products across the US and Canada. Ms. Solis said we need to bring broadband to underserved and into low-income areas. During the question and answer session, several members asked the witnesses whether requiring the unbundling and reselling of services helped to spur competition and investment by companies to deploy high speed broadband in their countries. Many of the witnesses said yes. The witnesses also noted that their countries’ size and geographic makeup is vastly different than that of the United States and these factors are also reasons why they have high broadband deployment than the US. The witnesses were also asked their thoughts on wireless broadband. The witnesses tended to believe there were many issues with wireless broadband and that it would complement copper or fiber service, not supplant it. Source: Western Telecommunications Alliance Newsletter