Policy: FCC scores court victory in Connect America move

The Federal Communications Commission gained a court victory in support of its Universal Service Fund reform efforts, with a federal appeals court upholding the agency’s Connect America program that is designed to subsidize rural broadband services.
Under former FCC Chairman Julius Genachowski, the FCC in 2011 announced plans for the Connect America program that would stop paying companies to fund telephone service in hard-to-reach or expensive-to-deploy areas and instead fund broadband connections. Initially, the agency said it planned to tackle intercarrier compensation and a high-cost fund program. At the time, Genachowski noted that high-speed broadband access had replaced telephone service and that 25% of U.S. households relied only on wireless service.
The Connect America Fund was to be funded out of savings from existing USF funding that is being used inefficiently and without accountability, Genachowski said. The agency said it would modernize the programs to support broadband networks; ensure fiscal responsibility; demand accountability and enact market-driven and incentive-based policies. Companies receiving USF funding would not be cut off immediately, but at the end of the transition any subsidies would be for broadband, not phone service.
This proposal drew a strong response from entrenched rural telecommunications providers that relied on the legacy system to fund their operations, and led to a court challenge.
Late last week, the United States Court of Appeals for the 10th Circuit, based in Denver, ruled in favor of the FCC, noting the argument against the program was “either unpersuasive or barred from judicial review.”
“After years of good faith efforts faltered, voting to approve the comprehensive reform of universal service and intercarrier compensation continues to be one of my proudest moments at the FCC,” noted FCC Commissioner Mignon Clyburn in a statement. “The reforms are changing the lives of millions of Americans who will receive broadband for the first time. I am extremely pleased that the 10th Circuit Court of Appeals has affirmed the FCC’s decision. I look forward to working with the Chairman and my colleagues as we tackle the next steps of reform.”
–The FCC’s plans to open up the 3.5 GHz spectrum band for small cell and unlicensed services has garnered general support from the wireless industry, though some want clarification on proposed rules before investing into those services.
AT&T noted in a blog post that the FCC needs to ensure the licensed aspect of its 3.5 GHz plans are protected if it wants wireless carriers to move forward with investing in new small cell deployments designed to take advantage of that band. The FCC’s plans look to support three usage models for the 3.5 GHz spectrum band, including current government usage, priority access licensees using a licensed spectrum model and general authorized access using an unlicensed spectrum model.
“AT&T recommends a transitional, phased-in, interim approach to deployment of ‘PAL’ and ‘GAA’ operations,” explained Stacey Black, assistant VP of federal regulatory at AT&T. “First, we recommend dividing the band into PAL-only, shared use and GAA-only sub-bands. This will allow PAL and GAA service providers to develop their products for initial deployment in a familiar environment, such as in our case, licensed geographic areas with a five-year license term and a renewal expectancy coupled to build-out requirements.”
Black added that separating PAL and GAA sub-bands would remove interference concerns and allow wireless carriers to immediately begin working on equipment and deployments. The carrier also called for a “shared-use sub-band as the development space” for the FCC’s spectrum access system database.
“Here, SAS providers, PAL and GAA users can collaborate, field test and ultimately deploy the three tier model without any concerns of interfering with the PAL or GAA-only sub-bands,” Black said.
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