Sen. Thune Slams FCC Over High-Cost Broadband Subsidies Shortfall - Broadcasting & Cable

Sen. Thune Slams FCC Over High-Cost Broadband Subsidies Shortfall

Chairman Pai signals he agrees and is on the way to fixing the problem
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Senate Commerce Committee chair Sen. John Thune (R-S.D.) hammered the FCC Thursday (Oct. 4) for not investing enough in subsidizing and deploying broadband to rural areas like his home state, calling it an "unacceptable failure" and adding that he has urged FCC chair Ajit Pai to act immediately to correct the situation.

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Pai's office signaled it agreed the FCC's budget-control mechanism worked against closing the rural digital divide, and it was on the way to fixing it.

Thune leveled his criticism in a hearing Thursday (Oct. 4) on rural broadband. He wants to make sure that rural areas get access to the same level of service as cities. "[R]ural Americans should never be left behind their urban counterparts," he said.

Ranking member Amy Klobuchar (D-Minn.) echoed that concern, calling broadband deployment the infrastructure challenge of this era. She also said one in four rural counties in her state lack broadband access.

Related: D.C. Must Help Close Rural Digital Divide

Both expressed concerns about lack of broadband on tribal lands and both called for addressing the funding shortfall and the cap on the Universal Service Fund high-cost fund before year's end.

"Chairman Thune is right that the last Administration’s budget control mechanism has stymied efforts to close the digital divide in rural America," said a spokesperson for Pai. "That’s why chairman Pai led his colleagues earlier this year to devote an additional $500 million to small, rural carriers that serve their communities. And that’s why he hopes his colleagues will join him later this year in establishing a sufficient and predictable budget so that those in rural communities are not left behind any longer.”

Thune opened the hearing with essentially an indictment of FCC inaction.

He said it had been a year since the FCC commissioners appeared before the committee and pledged to "conduct a thorough economic analysis of the impact of USF funding cuts on broadband deployment in rural areas before allowing any further reduction in the percentage of cost recovery for high cost areas."

But he said that hasn't happened. "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.

"The FCC’s failure to ensure sufficient and predictable funding jeopardizes the vitality of America’s rural communities, and makes it much, much harder for our witnesses and others like them to deploy broadband," he said. "This is simply unacceptable."

Thune said he had joined with other members of the South Dakota legislative delegation to send a letter to Pai Wednesday (Oct. 3) asking him for immediate action "to restore sufficiency and predictability to the High Cost program."

Thune did say he was "heartened" by Pai's plans for the Remote Areas Fund auction for fund for "extremely high-cost" areas.

Chairman Pai has long said that closing that rural divide is a priority for the commission--he is from rural Kansas.

Among the steps the FCC is taking to close that divide are providing about $6 billion in Connect America and Mobility fund subsidies for broadband in unserved areas, including tribal lands, including $340 million to bring 4G LTE to tribal lands. There will also that Remote Areas Fund that kicks in when the Connect America and Mobility Fund monies are used up, with additional money for still-unserved areas.

Pai has also cited the FCC's removal of obstacles to broadband buildouts -- which includes streamlining tower siting and historic preservation and environmental protection reviews -- though he said he had heard and recognized the need to protect "sacred properties," and would "continue to do so.

The FCC also voted in June not to apply rules that make certain small rural broadband providers pay into the Universal Service Fund based on their broadband customers.

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