Small Providers in the Big Picture of FCC Broadband Initiatives

Monday I stopped by Oakland Children’s Hospital & Research Center to catch up with FCC Chairman Genachowski who was announcing the Healthcare Connect Fund (HFC), and giving a shout out to those in California who are advancing telehealth initiatives. The purpose of the HCF is to expand broadband access to healthcare providers, as well as to patients seeking healthcare services.

FCC Chairman Genachowski (l) with Children’s Hospital President & CEO Dr. Bert Lubin (c) and Alex Briscoe, Dir. Alameda County Health Care Services Agency.                   Photo by Erin Goldsmith

I was fortunate to score a two-minute walking (literally) interview on the Chairman’s way to a tech demo at the hospital after his remarks. I wanted his take on an issue that ISPs (WISPs) frequently bring up, such as during this Gigabit Nation interview.

The Wireless ISP Association (WISPA) feels that FCC regulations inadvertently keep WISPs out of the broadband financing programs, such as HCF and the Connect America Fund (CAF), by heavily favoring ILEC’s at least in the first phase of these programs. I asked Chairman Genachowski if there is a way to create rules that result in more WISPs becoming a part of communities’ broadband solutions.

The Chairman observed that “the ILECs also complain sometimes that we don’t love them very much either.” But he brought up two points. First, it is a reality that the larger providers have an inherent advantage by virtue of their size. Reflecting this point is the fact that the California Telehealth Network (a pilot project leading to the HCF) Mr. Genachowski mentioned in his remarks is a statewide network that awarded its buildout task to AT&T. For a state the size of California, you’d be hard pressed to favor a collection of small local and regional providers to spearhead such a massive undertaking.

On the other hand, “we as an agency and also communities have to do more to get WISPs involved in broadband projects. They are an important part of this drive to expand broadband services, particularly into rural areas.”

The other point Chairman Genachowski made is that there are people within the FCC who are championing the role of WISPs and getting WISPs more involved. After a couple of phone calls, I found out this is an informal crew of folks who have taken on the role voluntarily. The good news is that these champions are in place. The downside, of course, is that this doesn’t have the impact of a department formally ordained and budgeted.

Rick Harnish, WISPA Executive Director has an idea worth exploring with the FCC that would both increase WISP involvement and also serve communities better by attacking that common plague of large incumbents scoring big grants, but delivering poor results. While the idea might be impractical for statewide projects, it has potential for local and countywide projects.

“Telecom subsidy programs should be set up as “voucher programs”.  The consumer [community] should be able to decide which provider they purchase broadband from, subsequently creating incentives for broadband growth and competition. It would also be a much more efficient method to fund broadband expansion in high cost areas. Not everyone wants broadband, although they need it. Paying $775 to ILECs for each household in unserved areas, and with few guarantees the provider will serve those areas, is very inefficient and does nothing to stimulate competition.”

To save a lot of administrative and logistical hassles, a voucher doesn’t necessarily need to go to each individual, particularly in a program such as HCF. Just aggregate the subsidies into one lump sum per town or county based on eligible constituents. Let a body created/selected by the respective communities develop a plan that complies with HCF guidelines, get HCF signoff on the plan, and then put out a bid for the lump sum. As Harnish says, “A voucher program would reward those companies that actually build out broadband services in the unserved areas, not those who promise they will do so sometime in the future.”

Two things, however, determine the likelihood of a new idea such as this taking hold: statutory straightjackets and administrative limitations. Various FCC staff members have pointed on different occasions that the statues passed by Congress that give the FCC its marching orders were drafted with “traditional” telcos in mind, and as you can imagine given the political forces at play, these statutes often favor telcos. One staffer I spoke with pointed out that they have worked to streamline the process and put programs such as the $100 million Remote Areas Fund in place so that more players, including WISPs and community networks, can participate.

The program administration issues and the logistics of moving huge amounts of money quickly present a challenge similar to what we saw with the broadband stimulus program. As the FCC staffer explained, their charter is to determine “what’s the fastest, most efficient way to get broadband to all Americans.” The challenge with getting an idea such as a voucher program established is that doing something dramatically new and trying to stay within the confines of statutory limits disrupts operations and requires a learning curve that takes time.

However, as Genachowski advised, communities and smaller providers alike must continue to advocate for meeting new challenges in new ways. In this vein, I point you to today’s Gigabit Nation interview with Sharon Gillett, former Chief of the FCC’s Wireline Competition Bureau. We’re discussing ways in which communities and providers can work their way through the maze of agency procedures.