President's Announcement on Rural Broadband Could Shift Development

In mid-January, President Obama announced that he will work with the Federal Communications Commission (FCC) to remove restrictions that prohibit cities and municipalities from competing for federal dollars directed toward rural broadband development. The President stated that he wanted to provide local communities with more tools and support to assist in building out networks and to renew the Rural Utilities Service managed by the USDA. The announcement was a huge step for the President to take as he continues to increase rural infrastructure investment in general and rural broadband in particular. In his State of the Union address to the nation, the President reaffirmed his sincere interest in making money available to municipalities which want to establish and build their own rural broadband networks.

While the goal of building out broadband networks is one shared by many, some are questioning whether enabling local governments to compete directly for this funding is the most efficient use of taxpayer dollars given the lack of state and local experience with actually developing, engineering, constructing, integrating and maintaining telecommunications networks. This development is an example of a recurring theme that will play out as Congress and the administration are expected to be very active on telecommunications policy in 2015 — the intersection between government and industry in the development of communications networks and provision of voice, broadband and cable television to underserved and unserved populations.

Already, the House Energy & Commerce Subcommittee on Communications & Technology has scheduled a hearing for January 21 entitled, “Protecting the Internet and Consumers Through Congressional Action,” where we expect to see members reacting to the President’s earlier comments regarding net neutrality.

The Senate is having a similar hearing on the same day and on the same topic, and draft legislation is being circulated in the U.S. House and Senate that would establish federal policy addressing net neutrality as well as remove the ability of the FCC to utilize Section 706 to expand eligibility to municipalities. What is clear is that telecom policy is ripening in Congress and the halls of federal regulators and much activity is anticipated.