Alaska broadband plan wastes $365M, doesn’t address middle mile, commissioners complain


The Federal Communications Commission has committed to improving broadband access, both wireline and wireless, to at least 245,000 Alaska residents over the next 10 years. But in a rare move, two FCC commissioners who often face off on opposite sides of discussions around telecom regulation, Ajit Pai and Mignon Clyburn, both dissented over the new Order.

“…the Alaska Plan does little to address the very real middle-mile problem” in the state, said Clyburn in a dissenting opinion written after the order passed this week.

Pai agreed in his dissent (PDF), saying that he had urged his colleagues in early July to use the money slated for improving broadband in the state to fund middle-mile construction in remote parts of Alaska, which are largely served by slower satellite-based broadband. “Unfortunately we fell just one vote short,” he said.

The FCC adopted a consensus plan created in February 2015 by the Alaska Telephone Association (ATA) that maintains, upgrades and extends broadband service across the state by both wireline and wireless carriers.

Participating ILECs will receive a fixed amount of support, frozen at adjusted 2011 levels, to maintain and upgrade their networks, and must meet specific performance requirements to continue receiving that support throughout the 10-year period, the order said.

Alaska was exempted from the FCC’s 2016 Rate-of-Return Reform Order, which was created partly to ensure that universal service funds were distributed efficiently. However, Alaska’s climate and terrain present unique challenges for service providers, necessitating the new Order, the FCC said.

Providers can elect to return to the voluntary Alternative Connect America Model (A-CAM) set forth for telecoms located outside Alaska.

Both Clyburn and Pai said that the Alaska Plan also violates a key principle of universal service reform, that of supporting multiple, overlapping telecom providers. “With Alaska’s ‘sublime scale,’ we should instead be directing support to areas that are unserved, not subsidizing competition in areas that already receive mobile service,” Clyburn said.

Pai noted that Alaska providers didn’t seem to have given much attention to issues like competitive overlap. “Even if some overlap does emerge, the Order makes clear that no one has thought through what happens next. How will we identify the support associated with the overlap? We don’t know. How will we decide which wireless carrier will continue to receive support? We don’t know. How will we change the performance obligations of the carrier that loses support? We don’t know,” he said.

The commissioner said that providing fixed support to overlapping carriers would result in “wasted payments” totaling $365 million.

For more:
- see Pai’s dissenting statement (PDF)

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