https://www.fcc.gov/news-events/blog/2017/02/07/setting-record-straight-digital-divide
Setting the Record Straight on the Digital Divide
February 7, 2017 - 12:45 pm
By Ajit Pai | FCC Chairman
In my first remarks as Chairman of the Federal Communications Commission to the
agency’s terrific staff, I stressed that one of my top priorities would be to
close the digital divide — the gap between “those who can use cutting-edge
communications services and those who do not.” I’ve explored that divide for
myself in places like Barrow, Alaska; Los Angeles, California; Clay, West
Virginia; and many more places. Now that I’m at the helm of the agency, I’m
determined to address it.
We’ve already hit the ground running. In the first vote under my Chairmanship,
I worked with New York Governor Andrew Cuomo, Senator Charles Schumer,
Representative Chris Collins, and other officials to direct $170 million in
federal funding to build out broadband in upstate New York to places that are
currently unserved.
In the second week of my Chairmanship, I shared with my colleagues and set
votes for February 23 on two detailed proposals for closing the digital divide.
One of them would direct billions of dollars — with a “b” — over a decade
toward making sure that all parts of this country have 4G LTE coverage.
(Currently, there are too many gaps where your phone displays “No Service” — as
I saw for myself during a recent drive from Wichita, Kansas to Des Moines,
Iowa.) The other would allocate nearly $2 billion — again with a “b” — for
advancing fixed broadband service across the country. With more connectivity,
more Americans than ever before will have digital opportunity.
Finally, I’ve engaged with Members of Congress about my proposal for Gigabit
Opportunity Zones. Under this infrastructure plan, the government would use tax
incentives to encourage the deployment of ultra-fast broadband in lower-income
areas as small as an urban city block and as large as a rural county. It would
also encourage entrepreneurs to take advantage of these next-generation
networks by creating jobs in those areas. Gigabit Opportunity Zones would
enable Americans to become participants in, rather than spectators of, the
digital economy. They would be a powerful solution to the digital divide. I
hope our elected officials will give the idea serious consideration.
* * *
At the same time, one recent FCC decision has caused some controversy of late.
Specifically, some have asked why the agency’s Wireline Competition Bureau
issued an order reconsidering nine companies’ eligibility to participate in the
Lifeline program, which aims to help make voice and broadband more affordable
to low-income Americans. It’s vital that low-income Americans have access to
communications services, including broadband Internet, which Lifeline helps to
achieve.
Unfortunately, many of the media headlines have sensationalized this story and
given some an entirely misleading impression of what is going on. Indeed, based
on the some of the coverage, one would think that we had ended Lifeline
broadband subsidies altogether. So I want to set the record straight about the
modest steps we have taken and why we have taken them.
First, our action only impacted 9 of the over 900 providers participating in
the Lifeline program. In other words, 99% of the companies participating in the
program are not affected at all.
Second, the applications of these nine providers to participate in the program
have not been rejected. They simply remain pending at the Commission.
Third, all but one of the newly designated providers covered by the order do
not yet have any customers.
Fourth, the prior FCC disregarded the well-established process for approving
applications like these. As the National Tribal Telecommunications Association
pointed out, several of the providers had never coordinated their applications
with Tribes, despite an FCC rule clearly requiring them to do so. These Tribal
representatives thus requested that the designations be reversed. Moreover, two
of the designated providers were approved in the middle of the 30-day period
for public comment — that is, before the public even had a chance to weigh in
on the designation. Whatever one thinks of the merits of these applications,
that was plainly improper.
Fifth, many of these designations were approved in the last days of the last
Administration (two days before Inauguration Day), over the objections of two
of the four Commissioners, despite the fact that the FCC’s congressional
oversight committees had requested that the Commission not take controversial
actions during the transition between Administrations (consistent with the
request from those same committees during the Republican-to-Democrat transition
in 2008–09). Thus, a majority of Commissioners never supported approval of
these designations.
Sixth, every dollar that is spent on subsidizing somebody who doesn’t need the
help by definition does not go to someone who does. That means that the
Commission needs to make sure that there are strong safeguards against waste,
fraud, and abuse before expanding the program to new providers. But consider:
◾The National Verifier — which is a new database that is intended to verify
eligibility to participate in the Lifeline program — does not currently exist
and will not start operating until the end of 2017. Further, it is not
scheduled to cover all states until 2019.
◾My investigation last year into these matters revealed serious weaknesses in
federal safeguards, allowing providers to indiscriminately override checks that
are supposed to prevent wasteful and fraudulent activities. (These checks
include common-sense steps like verifying the identity of would-be Lifeline
recipients.) From October 2014 until June 2016, wireless resellers had
overridden such safeguards 4,291,647 times in total.
◾The investigation also uncovered other loopholes, including one that let a
company claim subsidies for approximately 22,000 phantom subscribers each month
in the state of Michigan.
Seventh and finally, there is a serious question as to whether the FCC has the
legal authority to designate Lifeline providers or whether such designations
must be made by state governments, as has long been the norm. Indeed, well
before the prior FCC issued these last-minute designations, state regulatory
agencies had filed a substantial legal challenge to the entire process of the
FCC designating Lifeline Broadband Providers, arguing that it’s unlawful, and
the FCC itself recently asked the court for additional time to consider this
issue. For instance, Section 214 of the Communications Act explicitly says that
states must make designations for purposes of allowing companies to receive
Lifeline subsidies. The FCC has repeatedly, and for many years, recognized
states’ primary role in this area. By preempting the states’ role in
certification, the federal designations appear to run afoul of this legal
framework. Putting the designations on hold gives the FCC the chance to make
sure the process is legally defensible and to avoid potentially stranding
customers if the courts ultimately deem the process unlawful.
Hyperbolic headlines always attract more attention than mundane truths. For
example, a story detailing how the FCC was undertaking further review of the
eligibility of 1% of Lifeline providers wouldn’t generate too many clicks.
That’s long been the case in policy debates, of course. But at the end of the
day, my focus has been — and will continue to be so long as I have the
privilege of serving as the Chairman of the FCC — doing everything within the
FCC’s power to close the digital divide. I am committed, both by belief and by
law, to ensuring that the agency is focused on the 21st century version of our
20th century charge: “to make available, so far as possible, to all the people
of the United States, without discrimination on the basis of race, color,
religion, national origin, or sex, a rapid, efficient, Nation-wide, and
world-wide wire and radio communication service with adequate facilities at
reasonable charges.” We’ve made progress over the past few weeks, and we’ll do
more in the time to come to benefit all Americans.
