FCC Commissioners Talk USF, Infrastructure at ACA Summit

Federal Communications Commissioners Mignon Clyburn and Michael O’Rielly participated in a panel discussion at the American Cable Association’s 25th Annual Summit. Broadband infrastructure and the Universal Service Fund (USF) were major topics of conversation. Held in Washington, D.C. on March 21, the session was moderated by Tina Pidgeon, the Senior Vice President of Government Affairs for GCI.

Commissioner Clyburn led off by declaring that the number one mission at the FCC was to connect Americans through universal service. She stated that the Connect America Fund, or CAF (formerly known as the High-Cost fund, designed to encourage deployment in sparsely populated, high-cost rural areas) had started out as a bi-partisan initiative. However, she noted that USF is composed of four separate funds, designed to address separate needs. In addition to the CAF, USF is also composed of:

  • the Lifeline fund for low-income consumers, including initiatives to expand phone service for residents of Tribal lands;
  • the Schools and Libraries fund, also knows and “E-rate;” and
  • the Rural Health Care fund, designed to encourage telemedicine in rural areas that may have few health care facilities nearby.

Commissioner Clyburn expressed concern that one program might be “raided” to enhance another program’s funding. She noted that if low-income consumers cannot afford broadband services as a threshold matter, getting service out to them would be of little use.

Commissioner O’Rielly noted his longstanding concern regarding how much consumers, who ultimately bear the costs, pay into these funds. However laudable their goals, he stated that the four programs now total $11 billion, nearly double what they cost 10 years ago. He feels there should be an overall cap on collections, and noted that while three of the four programs are subject to spending caps, one (Lifeline) is not. He supports capping all four programs.

When asked about potential mechanisms for broadband infrastructure should Congress approve new funding, Commissioner O’Rielly expressed the view that USF programs work well, despite problems and imperfections. He noted, for example, funding through other programs to promote telehealth, which he felt would be more efficiently used through universal service. “We could do a lot with $600 million,” he said, referencing a Department of Agriculture broadband pilot program being funded in this year’s federal budget. “We don’t get credit” for the program’s successes. He also re-iterated his long-held view that funding should be prioritized for those areas with no broadband service at all.

Pre-emption Pros and Cons

Regarding infrastructure deployment, Commission Clyburn expressed hesitation to pre-empt state and local authority on matters such as tower builds and access to rights-of-way. She felt that federal, state, and local officials could sit down and collaboratively craft mutually complementary solutions. Commissioner O’Rielly agreed with this approach in general, stating that many states and localities are working hard to encourage investment in broadband infrastructure. However, he also stated that there were numerous instances of jurisdictions that were “bad actors.” As an example, he mentioned a municipality that had instituted a moratorium on small cell deployments. Pre-emption, he argued, was justified in these sorts of cases.

Retransmission Consent and Good Faith

When asked about retransmission consent reform, Commissioner O’Rielly held that the FCC is limited in its authority by statue. He understood the challenges faced by rising retransmission consent fees, but stated that there were multiple reasons for the increases, and the Commission’s ability to reform the rules were constrained by law. However, Commissioner Clyburn observed that there were different views on the scope of the Commission’s authority on this topic. Even if one agreed that the FCC’s powers are limited, she noted that the existing “Good Faith” rules might merit closer examination. While it may be difficult to determine good faith from bad, she indicated a willingness to give the matter further consideration.

When asked by the moderator what changes to the law they might want to see, Commissioner O’Rielly singled out Title VI, which governs video service providers: “It’s a mess.” The Cable Act, he said, “was built for a different time.” However, he indicated that changes would have to come from Congress.

Consolidation and Silos

In response to a question about the best and the worst developments they have seen in the industry in the 25 years since ACA’s formation, Commissioner Clyburn brought up industry consolidation. The FCC’s reaction was good in some cases, yet bad in others, she said. In particular, she pointed to the FCC’s rejection of the proposed AT&T/T-Mobile merger some years back as an example of good policy making. T-Mobile’s new offerings and enhanced competitive standing since that time, she said, demonstrates the validity of that decision.

Both Commissioners agreed that addressing different services, such as voice, video, and broadband, in different regulatory “silos” cause tensions. Yet the laws under which the FCC operates were passed before technological changes eroded many of the distinctions between various services. Commissioner O’Rielly, recalling his earlier comments on Title VI, noted that the laws the Commission works under divided services into silos. However, technology and consumer demand has moved beyond those silos, making services less distinguishable in the marketplace. This makes it more challenging for the Commission to adapt. “We’re stuck in these silos,” he said. “It’s hard to change.”

ACA Summit coverage brought to you by the ACA and ViodiTV.

[Steve Pastorkovich is a Washington, D.C.-based consultant specializing in telecommunications, trade association operations, and public policy. LinkedIn]

Author Steve Pastorkovich

By Steve Pastorkovich

Steve Pastorkovich is a Washington, D.C.-based consultant specializing in telecommunications, trade association operations, and public policy. Reach him at

One reply on “FCC Commissioners Talk USF, Infrastructure at ACA Summit”

Steve, thanks for the excellent summary. I am heartened that the commissioners generally agreed that more needs to be done to break down the silos inherent in the Telecommunications Act. Those silos made sense in decades past, but no more when everything has become converged over IP.

It is going to take legislation. Regulators are also going to need to apply the same sort of technology as well, if they are going to have any chance of staying current.

For example, FCC Commissioner Rosenworcel’s recent article proposing the use of blockchain as a way of inexpensively and dynamically managing spectrum is one that could provide a much more efficient use of this public resource than could ever be done with human intervention:

There does seem to be some common ground for the commission. Hopefully, Congress can also find the same common ground and telecommunications policy can be a model for bipartisan progress.

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