Begich Bill Encourages More Broadband Investment in Rural Communities

Press Release

Senator Keeps Pushing FCC, "High-Speed Internet Spurs Economic Growth"

Small telecommunications companies providing service in rural areas like those in Alaska are finally seeing signs of relief from faulty Federal Communications Commission (FCC) regulations discouraging broadband expansion projects. To support this relief, U.S. Sen. Mark Begich introduced legislation to help expansion and improvement of rural broadband services by relieving unfair financial burdens imposed on small, rural telecom companies.

Sen. Begich is a member of the Senate Commerce Committee that oversees the FCC.

"Broadband can bring new life to remote economies by expanding the reach of local business," said Begich. "Rural communities need high-speed internet to teach students, conduct job training and to access innovative services like telemedicine used across the state. Many Alaska communities lag far behind their rural counterparts when it comes to connectivity and internet speed. This is simply unacceptable and I refuse to let this continue on my watch."

Sen. Begich's bill, The Rural Broadband Investment Act of 2013 (RBIA), eliminates well-documented flaws in the FCC's 2011 Universal Service Transformation Order that caused financial burdens to small- and mid-size communications carriers operating in rural areas.

The FCC's order, because of a questionable statistical analysis to determine funding and a complicated and expensive waiver process for telecom carriers, was an immediate disincentive to investment. Sen. Begich heard repeatedly that it was causing Alaska companies to rethink and reduce broadband expansion plans needed to spur rural economic development.

Telecommunications providers are often reluctant to serve remote areas because of the small customer base and high capital costs. The FCC's Universal Service Fund provides financial support so remote and hard-to-reach areas of the country can get connected but its 2011 order was not helpful to smaller carriers.

Sen. Begich's ongoing efforts have produced results: The FCC last summer issued an order providing temporary relief for Alaska, and last week under the direction of its new Chairman Tom Wheeler, announced that the agency would soon do away with the statistical analysis known as the Quantile Regression Analysis.

"We should be doing all we can to increase investment in rural broadband access," said Sen. Begich. "Better access will help to grow local economies, educate our children, and prepare our workforce for current and future jobs. These are the kinds of investments that will pay dividends far into the future."

Greg Berberich, CEO of Matanuska Telephone Association stated, "The FCC's 2011 universal service reform hurts consumers in all rural parts of the country; but the impact on Alaska is disproportionate and even more severe. Senator Begich has been working vigorously to advocate for Alaska on this issue and the legislation he has introduced is well-timed and the next step in improving this ongoing USF reform process. We are grateful to Senator Begich for championing this issue. His is the type of leadership Alaska needs in Washington. We look forward to working with him, but we also take pride that it is our Alaska Senator who is fighting for the interests of rural America -- and especially those of us in Alaska who need a strong, reliable, and tireless voice in the nation's capital."

Alaska Telephone Association (ATA) Executive Director Jim Rowe said, "The (ATA) welcomed FCC Chairman Wheeler's recent decision to terminate the use of the Quantile Regression Analysis (QRA) and return all rate of return companies to a high cost loop support model. For two years ATA has argued that the assumptions made in the QRA model were not valid for Alaska. We look forward to revised rules that will allow for continued investment in broadband infrastructure. The Chairman's statement was welcome news, and a step in the right direction. However, Senator Begich's RBIA legislation is important to rural telecommunication companies because it not only addresses the QRA, but also two other important provisions within the transformation order which are the safety net additive and waivers."

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