Broadband

Senate Gets Rural Earful

Indie Cablers Weigh In On Broadband Grants 4/14/2013 8:00 PM Eastern

WASHINGTON — The first Senate Communications Subcommittee hearing of the new Congress focused on an issue much on the mind of cable operators: Rural broadband rollouts and the government’s role in spurring them.

Cable and telco operators had plenty of bones to pick with the Federal Communications Commission over government subsidies for their competitors, and for government limits on their own subsidies where that money is justified. And they had some backers on the subcommittee.

New subcommittee chairman Mark Pryor (D-Ark.), who pledged to hold a series of hearing on the state of communications, said he wanted input on challenges faced by small operators. He got it.

In the corner of small, independent MSOs were Patricia Jo Boyers, president of Boycom Cablevision and an American Cable Association board member, and John Strode, vice president of broadband, cable and phone provider Ritter Communications.

Boyers said it was imperative that the FCC not subsidize overbuilders, a point seconded by Sen. Kelly Ayotte (R-N.H.).

Boyers said she was not sure how the FCC was going to do it, but that it must be done. “Little folks like us have no recourse,” she said.

She said she “got” the point of the Universal Service Fund for phone, and of the FCC’s new Connect America Fund (CAF) that takes those funds and moves them to broadband.

“But you can’t use those funds, much as the RUS [Rural Utilities Service] has done in the past, to subsidize someone else to overbuild a suburban area where a company that is using private money, unsubsidized is already serving,” Boyers said. “That’s where the rubber meets the road for the Boycoms of the United States because, we have no voice but y’all.”

The FCC has proposed making the first $300 million tranche of the CAF fund more attractive to incumbent providers such as AT&T, Verizon Communications, CenturyLink and others, but cable operators are concerned that could mean overbuilding.

CenturyLink executive vice president Steven Davis said his company was not looking to overbuild those providing “adequate” service, a phrase that left some room for interpretation. He also made it clear that CenturyLink would need the FCC to change the benchmark subsidy if it wanted his company to apply for more of the CAF subsidy money. CenturyLink left more than $50 million on the table — Verizon and AT&T didn’t apply for any finding.

Strode, at the urging of Sen. Mark Begich (DAlaska), took issue with the National Telecommunications & Information Administration’s National Broadband Map, which is used to determine unserved and underserved areas.

While he would not go so far as to say it was inaccurate — he said it gives a fairly accurate accounting of his company — he did say that some of the areas that show as unserved are showing places where there are no residents.

The map “perhaps overstates” what some of his competitors are providing, he added.

TAKEAWAY

Small cable operators want Congress to make sure federal broadband grants aren’t subsidizing their competitors.

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