About the Authors
Marty Stern is a partner in Womble Bond Dickinson’s Washington, D.C. office, and leads the firm’s Communications, Technology & Media team. He represents communications providers as well as enterprises and technology firms that are large users of communications-related services, and advises clients on regulatory compliance, policy and transactional matters. His work includes representing clients on spectrum transactions, enforcement matters, FCC equipment authorization issues involving new technologies, and on sector-related issues surrounding M&A, financing and restructuring transactions.
Marjorie Spivak is a partner in Womble Bond Dickinson’s Washington, D.C. office and a member of the firm’s Communications, Technology & Media team. She advises telecommunications and broadband carriers on all aspects of regulatory compliance, as well as transactional and contractual matters. Her clients are located in rural and urban areas utilizing wireless and wired platforms on both licensed and unlicensed spectrums.
Bob Silverman is of counsel in Womble Bond Dickinson’s Washington, D.C. office and a member of the firm’s Communications, Technology & Media Team. His practice focuses on providing guidance to telecommunications carriers and technology companies navigating the regulatory, commercial and compliance structures of FCC and other government agencies.
The COVID-19 pandemic highlighted significant gaps in the availability of broadband access faced by millions of rural and low-income Americans, and the vulnerability of our broadband networks to single points of failure and other threats. This article discusses recent and near-term initiatives that are intended to address these issues in the coming years, and opportunities and risks they present.
- 2020 highlighted gaps in broadband access and security.
- Billions in federal funding are being considered to fill gaps.
- Biden administration expected to focus on broadband upgrades.
- $1.9 billion program established to “rip and replace” Chinese-made network equipment.
Over the last year, as COVID-19 forced us to physically isolate ourselves, broadband networks proved how critical they are to our nation’s economy. They kept us connected not only to our work but our family and friends. They have been, in the words of the Federal Communications Commission, “the indispensable infrastructure of our economy and our everyday lives.” Looking back over the pandemic, life without robust broadband seems almost unfathomable.
And yet the pandemic has highlighted gaps in broadband access — gaps between urban and rural areas, and a digital divide faced by low-income Americans. Indeed, one group has suggested that some 77 million Americans lack adequate broadband connectivity. At the same time, recent events have highlighted the vulnerability of our broadband networks to single points of failure and other threats.
The recent Christmas morning bombing outside an AT&T switching facility in downtown Nashville disrupted broadband networks not only in the Nashville area, but throughout Middle Tennessee and even into Alabama and Kentucky, knocking business, governmental, and residential users offline for days. And there has been a significant focus over the last several years on the supply chain security of our nation’s broadband networks, culminating in the requirement (falling largely on smaller rural providers) for providers to “rip and replace” Chinese network equipment, which is believed by policy makers to pose significant security risks.
So what efforts are underway, and what will federal lawmakers and policymakers do in 2021 to extend broadband access to more Americans, as well as safeguard this vital resource? With the Biden administration in the White House, as well as Democratic control of Congress, and a coming Democratic majority at the Federal Communications Commission (currently with acting FCC Chair Jessica Rosenworcel at the helm), significant shifts in federal broadband policy are expected.
Closing the Digital Divide
As an initial matter, federal policymakers are expected to continue their focus on funding initiatives that expand broadband access to Americans who currently lack adequate service.
Many of these people are without broadband access due to poverty. According to a 2018 American Community Survey, 60 percent of households without broadband earn $35,000 a year or less.
According to a 2018 American Community Survey, 60 percent of households without broadband earn $35,000 a year or less.
In December 2020, Congress delivered a boost to efforts to close this digital divide in the form of $7 billion of support aimed at bolstering broadband access. The funding, which was part of the yearend COVID-19 relief package, provides:
- Increased broadband funding for low-income Americans;
- Additional investment in broadband deployment; and
- FCC funding for more accurate broadband mapping, which is expected to allow decision-makers to better target federal dollars to the areas of greatest need.
“The COVID relief package rightly focuses on existing broadband gaps and wisely dedicates $7 billion to shrink the digital divide and promote broadband adoption and use,” said former FCC Chairman Michael Powell, now president and CEO of NCTA – The Internet and Television Association. “In supporting new pandemic-related assistance for low income families, minority communities and unemployed Americans, Congress importantly recognizes both the value of ongoing private efforts and the virtue of building new support mechanisms that complement and further energize these efforts.” In its statement on enactment of the relief package, NTCA – The Rural Broadband Association, noted that the COVID relief package provides “critical resources that will help advance and sustain access to the best possible communications services” and was particularly “pleased to see funding for broadband mapping efforts, which will help us better identify where service is and is not needed.”
What’s Next? Broadband in the Biden Administration
Faced with numerous crises, such as containing a raging pandemic, distributing vaccines in a prompt and efficient manner, and addressing the millions still out of work due to COVID-19, President Biden may not have strengthening America’s broadband network at the top of his agenda, but it is clearly among the administration’s top tech priorities.
Indeed, the president’s January 21, 2021 Executive Order on safely reopening schools during the COVID-19 pandemic specifically urges the FCC to “increase connectivity options for students lacking reliable home broadband, so that they can continue to learn if their schools are operating remotely.” Access to broadband has been one of the most difficult challenges for children during the pandemic, with the disparity referred to as the “homework gap.” To address this disparity, the FCC just announced that it is proposing changes to its E-Rate Program, which currently includes a restriction that funds can only be used to finance broadband in actual classrooms and school libraries, and therefore may not be used to help students access at-home broadband or even subsidize internet access at public libraries.
Information Technology and Innovation Foundation Broadband and Spectrum Policy Director Doug Brake said he believes broadband upgrades will be a focus for the Biden administration. He also believes these efforts will enjoy at least a certain level of bipartisan support. Moreover, with Democrats controlling Congress and an expected Democratic-controlled FCC when a fifth commissioner is nominated and confirmed, the odds have increased that the Democrats will be able to advance an aggressive legislative and administrative broadband agenda.
“I think we’ll have a big infrastructure package that authorizes a significant amount of spending for rural broadband,” Brake said. The Biden administration is expected to push a mammoth infrastructure plan, and as noted in the Senate confirmation hearing of newly confirmed Secretary of Transportation Pete Buttigieg, broadband deployment could be a key piece of that.
For example, Buttigieg lauded the importance of broadband and his support for “dig once” policies, which encourage laying fiber and other broadband infrastructure as part of road, bridge and tunnel projects. Buttigieg noted that “Even if this is being driven by another department, I would welcome the opportunity to make sure DOT’s side of the equation is open to supporting that broadband deployment because it’s so important in so many communities.”
The Biden-Harris campaign platform called for investing $20 billion in rural broadband infrastructure. The campaign also proposed tripling funding for Community Connect broadband grants to expand broadband access in rural areas and encouraging cities and towns to build municipally-owned broadband networks. Biden additionally proposes working with the FCC to reform the Lifeline program to provide broadband service to more low-income Americans.
A change in Washington also means renewed life for the Digital Equity Act. Introduced in 2019 by Senator Patty Murray (D-WA), the act would provide $120 million annually to address the digital divide in all 50 states, the District of Columbia and Puerto Rico through a formula grant program. In addition, another $120 million annually would be distributed, via competitive grants and administered by the National Telecommunications and Information Administration, to projects addressing digital equity. The Digital Equity Act would provide more than $1 billion over five years toward closing the digital divide. President Biden supports passage of the Digital Equity Act and with Democrats now controlling both houses of Congress, its odds of becoming law have increased significantly.
A change in Washington also means renewed life for the Digital Equity Act. Introduced in 2019…the act would provide $120 million annually to address the digital divide in all 50 states, the District of Columbia and Puerto Rico through a formula grant program.
Among other FCC changes under the Biden-Harris administration, we could also see the FCC reviving its Open Internet Rules, asserting expanded authority over broadband access providers and their practices.
Protecting Broadband Infrastructure
Most users tend to think of broadband like they would any other utility—something always available, an invisible force that stays ready behind the scenes for whenever it is needed.
But broadband networks require a tremendous amount of physical infrastructure. When the Nashville bomber apparently targeted an AT&T facility, he was able to do a tremendous amount of damage to this interconnected system and, in turn, interrupt service for hundreds of thousands of users, including FirstNet service for first responder broadband connectivity.
Vanderbilt Professor of Computer Science Douglas Schmidt said the attack points out the vulnerabilities of the nation’s broadband service and hopes it will lead to conversations about how to bolster the security of this vital infrastructure.
“That's the Achilles’ heel. The weak link,” Schmidt told USA Today. “When one thing goes wrong and everything comes crashing down.”
Former DHS official Juliette Kayyem told the Washington Post that telecom centers, like the one targeted in Nashville, often are located in the heart of cities to be closer to workers and utility services. But, that also makes them more difficult to protect.
The FCC is expected to examine the broader implications of the Nashville bombing and how to better protect operations centers from similar attacks in the future, and also to continue its ongoing efforts at developing industry best practices to build into networks resilience and redundancy to contain and limit the impact of these type of catastrophic events, whether man-made or nature-related.
Supply chain security involving broadband networks is also expected to remain a focus of policymakers and the industry in 2021. Following passage of the 2019 National Defense Authorization Act and culminating with a supply chain security proceeding at the FCC implementing the Secure Networks Act of 2019, broadband providers will now be required to “rip and replace” the network equipment of Chinese manufacturers Huawei and ZTE. This burden falls disproportionately on small rural providers, which historically have been the predominant US purchasers of the lower-cost Chinese equipment.
A major question that loomed throughout 2020 was how this forced replacement would be funded, posing a significant risk to the provision of broadband services in rural markets. Fortunately, as part of the COVID-19 Relief Act, Congress appropriated $1.9 billion to fund the Secure Networks Act to assist in the replacement of Huawei and ZTE networks in the United States, thereby ensuring that, as Womble client, the Rural Wireless Association observed, small rural carriers “can replace and then remove their unsecure Huawei and ZTE equipment and services.” As one RWA member noted, this funding will allow companies to “confidently move forward after over two years of uncertainty that has stymied our ability to provide broadband services, especially during the COVID pandemic.”
Significant Opportunities and Potential Risks
These various access and security initiatives provide significant opportunities, as well as raise potential concerns for broadband providers, technology companies and other large enterprise users, and should be closely tracked. For example, the $1.9 billion Chinese equipment “rip and replace” reimbursement program is a new federally funded program being administered by the FCC with new rules, procedures, and deadlines, that effected carriers and their new equipment vendors will need to understand and follow to ensure they are able to recover their covered reimbursement costs. At the same time, the Huawei and ZTE equipment prohibition has not only affected entities contracting directly with the U.S. government, but has been flowed down to their suppliers throughout the economy, requiring these downstream vendors to themselves ensure and certify that their products and services are free of the prohibited Chinese equipment.
These various access and security initiatives provide significant opportunities, as well as raise potential concerns for broadband providers, technology companies and other large enterprise users, and should be closely tracked.
And, an open question is whether these limitations and prohibitions will be extended more broadly, and if so, how. For example, days before the Inauguration, the Trump administration’s Department of Commerce released new rules that block purchases of communications technology from China and five other countries deemed foreign adversaries – Russia, Iran, North Korea, Cuba and the Maduro government of Venezuela. The new rules would allow the blocking of imports such as communications hardware, software and other equipment from these countries as a national-security risk, though the extent to which these new rules will actually go into effect and be implemented by the Biden Administration remains open.
Also potentially around the corner are new “Open Internet” rules that promise to revisit the FCC’s earlier net neutrality regime. Apart from legal questions that will need to be reexamined, as well as how closely they might track the commission’s previous broadband conduct and privacy rules, is whether new rules could be expanded in new ways including reaching beyond broadband access providers to various platform providers. Also on tap is, whether as part of revisiting net neutrality, the commission could potentially turn broadband access into an assessable service for federal universal support mechanisms, which would help shore up the hemorrhaging Universal Service Fund program, but would also, if implemented, add a new federal surcharge to end user broadband bills.
The commission’s potential expansion of the E-Rate program will also provide potential funding opportunities for remote learning, potentially opening up E-Rate funding beyond traditional service providers. Similarly, the FCC just announced that it was opening up new round of COVID-19 Telehealth funding, implementing a new $200 million program to help health care providers offer telehealth and connected care services and connected devices to patients at their homes or mobile locations in response to the COVID-19 pandemic.
The commission’s potential expansion of the E-Rate program will also provide potential funding opportunities for remote learning, potentially opening up E-Rate funding beyond traditional service providers.
Just as the new administration inherited a wide array of political, health, and economic crises, the new FCC is similarly poised to tackle a number of broadband issues that our COVID-19 world has made all the more critical, including broadband accessibility and security. In addition, the new Democratic administration is likely to initiate new proceedings and adopt new rules that will have an impact on the broadband ecosystem for years to come, not only affecting broadband providers but also companies within and adjacent to the broadband ecosystem.
By tracking these proceedings and developments in the broadband space, as well as looking for ways to participate and help shape outcomes, firms can identify and capitalize on significant new opportunities, particularly around innovative broadband funding sources, while avoiding unanticipated pitfalls.
Want more insights like this? Download our Everything From Everywhere white paper!