Can the FCC Cut ISP Costs for Rural Broadband?

FCC Chairman Tom Wheeler earlier this week told CCA attendees in Seattle that one of his goals is removing regulatory barriers to broadband deployment; he reiterated that objective to lawmakers last week during a Senate FCC oversight hearing, Inside Towers reported.

Now, Commissioner Ajit Pai has laid out what’s needed to further deployment to rural areas, calling it a “Digital Empowerment Agenda.” He listed the following details about how to make it happen.

1. The commission has a shot clock by which time local governments are supposed to review wireless infrastructure applications. But if a city doesn’t process the application in time, the only recourse is to file a lawsuit. Pai proposes giving the shot clock teeth, so a city’s inaction still allows a company to proceed.  
2. Reform pole attachment rules to bring down the costs ISPs pay to attach fiber, coax, and other infrastructure to utility poles, suggests the commissioner. “We should exclude capital expenses from the pole attachment formula and re-examine the reasonableness of costs charged by pole owners for preparing poles, ducts, conduits, and rights-of-way for pole attachments.” Congress should expand the FCC’s authority over poles owned by railroads or governments. 
3. The FCC should develop a model code for cities and towns that want to encourage broadband deployment and competitive entry. He proposes the agency establish a Broadband Deployment Advisory Committee and task the group with crafting a model code covering local franchising, zoning, permitting and rights-of-way regulations.
4. Reasonable fees and shot clocks should be part of the approach in addition to hiring certified safety inspectors to speed up deployment and review how new entrants can get speedy access to poles and conduit. The committee should take inspiration from policies that have worked in “broadband-friendly” communities, he suggests.
5. The federal government needs to speed up broadband deployment on federal land; Pai suggests by standardizing fees and establishing longer lease terms with renewal expectancies. “I hope these ideas give providers the certainty necessary to invest.”
6. Finally, “dig once” should be core to federal transportation policy. Every road and highway construction project should include the installation of a conduit that can carry fiber optic cables.

But to make the agenda succeed in rural areas, more needs to happen, like moving forward with a revised mobility fund and ending subsidies in places where private investment is working. The fund needs to be based on real need, he says. “That means we shouldn’t be tied to the $400 million per year providers are receiving today nor the $500 million the FCC proposed five years ago. And we need to make sure that the most efficient provider meets accountable benchmarks.”

Meeting rural broadband deployment goals may take more money than is in the Universal Service Fund. Congress should authorize a “rural dividend” from spectrum auctions. Some 10 percent of the proceeds would be awarded to certain areas for a number of years, enabling wireless providers to make long-term investment decisions. If this plan had been in place over the last decade, an additional $7 billion, or $700 million per year, would have been available for deployment, he believes.

License terms for wireless companies should be increased to 15 years in exchange for increased buildout obligations. “And importantly for CCA members, these additional buildout obligations may encourage license holders to partition and sell their licenses to rural wireless providers hungry for spectrum.”

He also recently proposed creation of “Gigabit Opportunity Zones” to spur broadband deployment in low-income areas to boost job creation and investment. That involves giving any ISP — including wireless providers — financial incentives and tax breaks to deploy antennas, small cells, backhaul and other infrastructure.