rural landscapeThe Expanding Opportunities for Broadband Deployment Act introduced in the House of Representatives earlier this month would eliminate the requirement that network operators must be certified as eligible telecommunications carriers (ETCs) in the states for which they receive money from the Universal Service Fund (USF).

Late last week, the bill received a boost from FCC Commissioner Michael O’Rielly. Both O’Rielly and bill sponsor Congressman G.K. Butterfield (D-North Carolina) argue that eliminating the ETC certification requirement would help spur broadband deployment.

“Many unserved areas lack broadband access in part because experienced and highly qualified broadband providers who are not designated as ETCs are not permitted to participate in the USF high-cost program,” explained a Butterfield press release.

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Butterfield also argued that eliminating the ETC requirement would increase competition, which would lead to lower broadband prices.

Both Butterfield and O’Rielly argued that eliminating the ETC requirement would enable more providers to participate in the Rural Digital Opportunity Fund (RDOF) auction, which will award $20 billion in USF broadband funding and which is scheduled to begin in late October.

ETC Certification
As O’Rielly explained in a blog post on the FCC website, the ETC designation was created in the 1996 Telecommunications Act and requires USF recipients to provide basic voice service and comply with state telecom regulations. Depending on the state or states served, ETC certification can be a time-consuming and resource-intensive process and can entail regulatory and litigation risks to the point where it prevents some companies from competing for USF support, O’Rielly said.

“Individual states have specific requirements…covering everything from billing to service level reporting, installation, late fees, accounting standards, and customer complaint processes, which add complexity for companies that operate in multiple states…and may even conflict with providers’ existing local regulatory requirements for other services in multi-product bundles,” O’Rielly wrote.

According to O’Rielly, the FCC already imposes legal, technical and financial requirements on auction winners, and “ETC status doesn’t seem to confer any additional necessary protections.” He also noted that some states have established their own broadband funding programs that do not require ETC certification “without any problematic consequences.”

In theory, part of a state’s role is to act as “cops on the beat to police bad behavior,” O’Rielly observed. But broadband by its nature is an interstate service and therefore, states lack authority to regulate it, he said. Accordingly, states’ role is relegated to informing the commission of any funding recipients’ FCC broadband rule violations.

“That’s not a cop but a shopping mall security guard,” he said.

O’Rielly argued that while the FCC could forbear from requiring USF recipients to get ETC designation, that approach would likely trigger lawsuits. A legislative solution such as the Expanding Opportunities for Broadband Deployment Act would be better, O’Rielly’s blog post argues.

Legislators may want to consider eliminating new ETC requirements totally or establishing a consistent nationwide process for gaining certification, O’Rielly added.

“If our country can do this for the college application process, it can be done here too,” he said.

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