FCC’s Simington sounds off on the future of broadband, USF

FCC meeting room
Simington also addressed potential options to reform the FCC’s Universal Service Fund. (BRENDAN SMIALOWSKI/AFP via Getty Images)

Fiber may be all the rage right now, but the Federal Communications Commission’s (FCC) Nathan Simington argued wireline technology might not be the best broadband solution for every use case.

Simington tackled the question of whether fiber should be rolled out to every American during an Internet Innovation Alliance event, explaining some have argued that the U.S. should pursue universal fiber deployments in the same way the country went about electrification. But he noted “there’s another way to look at it and that’s to say there’s a risk of making a decision based on current technological realities that are not guaranteed in the future.”

“There was also a case for nationwide broadband in 1996, 1997, and at that time if we’d mandated universal DSL, well we certainly never know what we missed out on,” he said.

The commissioner stated “obviously fiber is a very robust technology” but it’s not necessarily one that everyone wants or needs. He pointed out approximately 20% of all broadband users in the country are “device-only” consumers, meaning the only use they’d have for fiber would be to connect a hotspot device.

Additionally, he argued fiber might not be the best choice for decentralized business operations, such as those on a ranch or dairy farm, noting these instead might prioritize options that can provide connectivity across a wide area.

“So I think we can pushback on fiber to the home universally at least in noting that there are edge cases and adoption issues there, and that some degree of wireless is going to have to be part of the broadband future,” he said.

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Competitive Carriers Association CEO Steven Berry previously made a similar argument to Fierce, insisting wireless should receive a greater share of federal broadband funding.

USF reform

Simington also addressed potential options to reform the FCC’s Universal Service Fund (USF), noting one approach would be to “say that broadband is essentially the equivalent of telephone service back in the day and therefore we’re going to put it everyone’s broadband bill.” While he acknowledged this path would raise questions around differential payments for different kinds of users, “it would smooth things out somewhat” and broaden the base of USF contributors substantially.

The USF aims to bridge different elements of the digital divide through four key programs: the Connect America Fund, Lifeline, E-rate and Rural Health Care. It is fueled by a contribution base of operators who are required to pay a portion of their telecom revenues into the fund. However, broadband revenues are not currently subject to a USF assessment.

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A recent report sponsored by NTCA – The Rural Broadband Association noted the revenues subject to USF payments have fallen 63% since 2001, from $79.9 billion to $29.6 billion in 2021, warning this puts the fund’s future in jeopardy. The report floated the idea of assessing broadband revenues as one of three options to reform USF contributions, with the other two options being assessments on connections or telephone numbers.

“I don’t want to pre-judge where this is going to come out politically – ultimately there’s a political element to the decision – but whatever we decide we have to do it soon and the industry has to, I think, come together to accept that there’s a new normal,” Simington concluded.