During the 2008 presidential campaign, Barack Obama promised to "reform the Telephone Universal Service Program, direct the FCC to better manage the nation's airwaves, and encourage public-private partnership to get more low-income communities connected."
We'll take each aspect of this promise individually.
• Reform the Universal Service Fund. The Universal Service Fund was established by the Telecommunications Act of 1996. It was intended to spread telecommunications access to regions and populations that lacked adequate service. The fund supports four programs. One, the "high cost” program, subsidizes telecommunications services in areas where building the required infrastructure is expensive, such as isolated areas. The other three programs are aimed at low-income Americans; schools and libraries; and rural health care services. The fund is supported by phone companies, which in turn pass the costs to their consumers as line items on their phone bill.
The most significant change under Obama was reorienting the "high cost” program from telephone service to broadband.
In its Omnibus Broadband Initiative, the FCC staff wrote that "broadband is the great infrastructure challenge of the early 21st century.” The proposal suggested shifting the funds from the "high cost” program to two new funds over the next 10 years. One, the Connect America Fund, would support the expansion of broadband to underserved areas. The other, the Mobility Fund, would improve wireless coverage in states where such services are lagging.
This initiative was a nonbinding proposal, but most of it was ultimately enacted by the Federal Communications Commission, an independent agency, in an Oct. 27, 2011, order. The order established a $4.5 billion annual program for six years, requiring telecom companies to offer broadband services and to meet performance requirements.
• Direct the FCC to better manage the nation's airwaves. During Obama's tenure, the FCC has moved to reallocate portions of the spectrum to broadband.
Because most of the usable spectrum is already allocated, the FCC can only advance broadband access by moving a given space on the spectrum from an existing use to a new use. This process, known as repurposing, "can be lengthy, from seven to 15 years,” according to the Government Accountability Office.
In its Omnibus Broadband Initiative, the administration wrote that the FCC has "just a fraction of the (spectrum) that will be necessary to match growing demand” for broadband. So it recommended making 500 megahertz of spectrum newly available for broadband within 10 years, of which 300 megahertz is made available for mobile use within five years.
To do this, the administration proposed "incentive auctions,” which try to convince existing spectrum holders to give up their holdings, or to reduce the amount of spectrum they need by making their operations more efficient, by allowing them to share in the proceeds when their holdings are auctioned off to newer entrants.
The idea of taking back spectrum from current holders, even if it's done voluntarily through incentives, has been controversial. But the effort has been proceeding.
In September 2012, the FCC unanimously approved a proposal to encourage television broadcasters to give up spectrum to broadband carriers through a system of auctions by 2014. According to the technology trade publication C-Net, FCC Chairman Julius Genachowski called it the world's first such auction process -- and added that when it was first proposed in 2009, no one thought it could work.
• Get more low-income communities connected. As we noted in our prior update, the economic stimulus bill passed in February 2009 tasked the Commerce Department with distributing $4.7 billion in grants to "support the deployment of broadband infrastructure in unserved and underserved areas, to enhance broadband capacity at public computer centers, and to encourage sustainable adoption of broadband service." The program is known as the Broadband Technology Opportunities Program.
In its analysis of the program, the Government Accountability Office found that the progress in allocating this money was difficult to document due to data limitations. However, at the very least, one pot of money, overseen by the National Telecommunications and Information Administration, had disbursed $1.9 billion of the $3.8 billion it had been given through July 2012, while a second pot of money, run by the Rural Utilities Service, had spent roughly $1 billion of the $3.3 billion it had been given. While this suggests that the funds" efforts are only half implemented so far, GAO cautioned that this figure may understate what has actually been built, since payments are sometimes made after the work is completed. For instance, projects supported by the first of these two funds have built out 76 percent of their planned network miles, according to federal data.
Expanding broadband to low-income and rural regions is a work in progress and will take many years to complete. But significant progress has been made on each of the three pieces of Obama's promise. We rate it a Promise Kept.