State Commissioners Fear Costs of Broadband Too High for Universal Access

Not everyone wants or needs broadband, said Commissioner Anne Boyle of the Nebraska Public Service Commission. “Some people just don’t want to -- and they're not going to,” she said of computer use. Those considerations should be looked at before officials “feel we have to blanket the country with a technology that is incredibly expensive,” she said. Kjellander described similar sensibilities in pockets of Idaho. He encountered bad TV service in the remote community of Salmon years ago, he recounted, and complained. “Son, if you came to Salmon, Idaho, to watch TV, you're making a mistake,” a toothless older man told Kjellander at the time, he said. Officials will always be chasing the next big technology, he said, which he called good but always a chase.

There’s two types of rural America, said Alaska Regulatory Commissioner Kate Giard, identifying “convenient” and “inconvenient” regions when it comes to the high costs of building out infrastructure. The costs of inconvenient rural America “far exceed” those of the convenient rural areas, she said. “Alaska happens to be almost entirely inconvenient.” The distinction is important, Kjellander agreed, describing some rural spots that are an “economic nightmare” and would only be built out if “extraordinarily subsidized."

If the government invests heavily in broadband, proper utilization of its potential will be important, said Kjellander. He referred to former FCC Chairman Newton Minow’s 1961 speech that TV is a “vast wasteland” compared to its public-interest potential. “How many playful kitten videos do we need to download?” Kjellander asked. The benefits of broadband in education, healthcare and other areas may be real but need to be tapped, he said. Giard called broadband “critical” to Alaska, however, and said her state will be left behind if broadband comes to the “lower 48” states and not her own. Boyle questioned community broadband and whether there are enough businesses in these very rural areas to “warrant” such endeavors. “Even with the USF order ... we still have pockets of unserved areas, and perhaps always will,” Kjellander said of Idaho and the FCC’s November ruling.

The commissioners all expressed frustration with working with the federal government. Boyle emphasized practicality, and encouraged the FCC and states to form a “hand-in-glove relationship.” Much of the recent FCC action has happened “without state involvement,” including the USF order, she said. State commissioners “need to get everybody’s attention,” she said. The FCC is trying to accomplish $40 billion to $50 billion worth of broadband ambitions with about $7 billion, she added. The federal government used to partner with states better, Giard said, describing “a turn” at the FCC away from its past practices in recent reform efforts. Other struggles exist closer to home, Kjellander said. He described the “extraordinarily painful” task of educating local lawmakers who don’t understand telecom issues. Idaho politicians initially saw the FCC USF order and wanted to “mirror” their state’s USF fund with the federal one, he said. The Idaho commission “convinced them to hold off,” he said.

The commissioners agreed new funding sources will be needed to build out broadband throughout the U.S. Kjellander suggested taxes on current broadband use and noted a fee on broadband bills “would sure go a long way” toward helping these higher cost areas. Boyle and Giard agreed. Boyle called VoIP “an application” and considered ways to compel its contribution to USF funds. Nebraska and Kansas received approval to collect fees from VoIP providers on an interim basis, she said. Idaho offered a tax credit for broadband that provided some incentive before, Kjellander said. The cost can’t come solely from landline and access minutes, they said. The commissioners discussed the feasibility of expanding service with satellite, the fate of copper and the feasibility and complications of wireless. “This is not a one-size-fits-all country,” Boyle said. “I don’t want to close the door on anything.”