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Washington Perspective: Putting Broadband First and Delivering Parity and Clarity for Businesses

10.26.2017

The following are the remarks USTelecom President & CEO Jonathan Spalter delivered on October 26, 2017 at the Great Lakes Technology Showcase in Fort Wayne, IN

I am thrilled to be with you.  I started in this new role at the beginning of the year…moving my family out to Washington, DC at an interesting time.  We came from the Bay Area…Silicon Valley-adjacent.  So it’s been an adjustment. 

This is my first visit with a gathering of state associations and their members, and it means a lot. 

I’ve spent a good part of this year on the road getting to know the companies and the industry I represent, and I know many of them do their work right here in the Great Lakes region.

Probably the single most powerful common thread I've encountered through all these visits is that when companies say they have roots in "the nineties,"as often as not, it seems they mean the eighteen-nineties.

These are extraordinary stories often with generations of the same family with a heritage that extends back to connecting the country via telephone lines to work equally today connecting whole communities to high-speed broadband and, with it, a whole world of opportunities in the digital age that are on display at this conference.

And, at no time do we see how wrapped up this connectivity is in the very idea of America than with the recent response and resilience of the ongoing hurricane recovery efforts to the south. 

It’s a powerful reminder of the central importance of broadband infrastructure to families and communities across this country. It’s at times like this that the importance of your work, your value, and your commitment to the communities you serve is on full display, and I must say: It inspires me and makes me very proud to work on your behalf.

There is so much we do for this nation, and it’s time our federal policies consistently act as constructive partners to our work building opportunity for families and communities across this nation.

In pursuing this agenda, we are up against a crowded field in Washington.

Tax reform is coming to the fore, and done right can certainly be meaningful to our work.  It’s been 31 years since Congress last reformed the tax code. This will consume most of our lawmakers’ attention in the months ahead.  And, we will explore ways to encourage broadband investment and deployment.

The environment should be favorable to those ideas.  We’ve spent a good part of the year making the case that you can’t talk about infrastructure in this country without having at the heart of any conversation…any action…the infrastructure of 1s and 0s that lie at the heart of our nation’s economy and competitiveness in the digital age.

Both the White House and Congress are beginning to piece together plans for an infrastructure package; broadband is a core component of both efforts.  Whether the solutions involve direct spending, tax incentives and loan programs or all of the above, we are working to make sure any parameters put around these funds are reasonable.

The third big priority in Washington, unfortunately, has become a mainstay of these deeply partisan times and that’s keeping the lights on and avoiding a government shutdown by kicking the can with temporary spending bills.  Congress issued a three-month stay of execution, referred to in polite company as a continuing resolution, in early September.  So, there will need to be another vote in December.

So how does this backdrop translate into our work of moving our connected nation forward?  A wholesale rewrite of the Telecom Act is not on the table anytime soon.  It is just not a near-term Congressional priority.  And, that means we take things piecemeal on Capitol Hill, at the White House, the FCC and other relevant agencies.

This is the agenda for focusing our energy and engagement where it matters most that USTelecom members have coalesced around.  We want everything we do to drive toward what our members need most: a modern policy framework that puts broadband first and delivers parity and clarity for your businesses.

So let's break down what that means.

First and foremost, as I’ve stated, broadband comes first in any infrastructure conversation.  President Trump is there.  It’s in his executive order.  And, the feeling is bipartisan, which as anyone with a Facebook account knows, is a rarity in our nation’s politics right now.  House and Senate Democrats have proposed a broadband infrastructure plan that would allocate $40 billion for buildout in unserved areas.

And, one thing I’d like to make clear: Infrastructure is an issue at all levels of government.  As much as I’m here today to provide you an update on what’s happening in Washington and to ask for your support and engagement in these important efforts, I’m also here to stand shoulder to shoulder with John and the Indiana Association, Scott in Michigan, and Charley in Ohio[1] as they fight the good fight at the state and local level on rights of way and other critical deployment issues. 

Everybody wants to be that governor, that mayor, the congressman, the senator, the PUC commissioner, who helped bring the innovation economy home.  But it starts with these seemingly mundane tasks of looking at the rules on the books, looking at the urgency of the issue, looking at the modern world as it is today and not as it was in the 1890s, and making clear the rules don’t just undercut deployment, but rollout the welcome mat for all that broadband makes possible. 

What do we all want…to connect everyone and every community in this country to the full potential of broadband—for local jobs and economic growth, for health care, for education, for public safety. But that means we all need to have the discipline with every policy decision at every level to ask the question: Will this help?

I can tell you right now, one of the banes of John’s existence right now, the effort by cities across the state to contemplate their own set of rules, restrictions and requirements for small cell and other network deployment. This categorically hurts and hinders the potential of broadband in Indiana, Michigan and Ohio, wherever we see these efforts.

We’re all watching this trend of consultants going in to rural electric co-ops and trying to sell them on the idea of getting into the broadband business. We’ve seen it with municipal governments before. It doesn’t end well for anyone—the cost, undercutting the economic case for sustainable rural broadband deployment, the technical side of managing these networks. 

It is said that ‘for every complex problem, there is a simple and wrong solution.’  Depleting the universal service fund to finance rural electric coops overbuilding broadband networks, is a wrong solution. Using precious resources in the farm bill, as some have suggested, to artificially finance these efforts is a wrong solution.

And, just as we advocate for what is right about modern, constructive broadband policies, we will stand up and fight together against the bad ideas.

You take one of the most critical issues before our country today—our cybersecurity…the security of our financial systems, our power grid, every system that is connected. You know how we do it?  It is a collaborative, public-private effort between good people in government and industry, experts and engineers who know how these systems actually work, in constant contact to keep one step ahead of a constantly innovating enemy. They know that static rules and regulations, let alone a disparate patchwork of them across the country, cannot hope to keep pace.  So, we work together.

Just imagine if we could do the same in playing offense on rural broadband. Rural America has the most to gain from modern, constructive broadband policies and, we have an historic opportunity today to work together to realize that potential.

Universal service, of course, is a cornerstone of this work.

We are marching toward a 2018 Connect America Fund II auction. We're working closely with the FCC to address concerns about proposed auction rules and bidding procedures. We'll continue working hard to ensure our companies have a fair opportunity to compete for this nearly $200 million annual pool of funds.

We’re also in court right now with CenturyLink, AT&T and others challenging the 2015 FCC order mandating that price-cap carriers continue to provide unprofitable voice service in extremely high-cost areas without receiving universal service support—an order that amounts to a $1 billion annual unfunded mandate.

And, universal service is just one aspect of a modern, collaborative policy approach.  From a business perspective, it’s no secret what you also need—the confidence to invest in these networks without fear of policy reprisal.

That means being out front with the media and members of Congress who are irate, as we and our customers are, about robocalls, making clear how seriously our industry takes the issue and how aggressively we are working to combat this scourge. Our USTelecom expert, Kevin Rupy, was just before the Senate Committee on Aging explaining the issue and the many efforts underway. 

Clarity also means taking every opportunity to modernize the rules.  This means getting into all kinds of fun stuff, including as service discontinuances, copper retirement, and pole attachments. Going after these outdated rules with, as Chairman Pai has put it, a regulatory weed whacker.  A son of rural America form Parsons, Kansas, population, last I checked, 9,906, Chairman Pai understands the importance of all of this work to what he’s made clear is his #1 priority—closing the rural digital divide.  So, we are supporting his process-reform initiatives understanding that these details matter from requiring a cost-benefit analysis where a rulemaking may do economic harm to establishing an FCC Office of Economics and Data.

And, of course, topping the priority list when it comes to regulatory clarity is making sure all of you have the confidence that your investment in state-of-the-art broadband networks won’t be regulated like rotary phones.

We are nearing the end-game at the FCC on Title II regulation of the internet. Across all forums, from 140-character tweets to in-depth regulatory filings, we have been vocal proponents of Chairman Pai’s “Restoring Internet Freedom” proceeding.  

We expect favorable FCC action at their December meeting. We also are engaged with congressional leaders on bipartisan legislation to make modern open internet protections permanent for all consumers.

And, of course, we are leaving no flank exposed.  We continue to work with our allies to keep the door open at the Supreme Court, should that path become necessary.

Here you see some of our social media engagement around this issue. One critical component is cutting through all the noise and disinformation. There is no side in this debate that opposes an open internet. There is zero chance our customers will lose the absolute right to be in control of their online experience. And, there is so much to gain with a modern policy approach that doesn’t treat essential modern infrastructure like it’s a relic worthy of the Smithsonian. 

And as central as the net neutrality debate has been to our industry for years and years, and I’m not suggesting it’s going anywhere anytime soon, it is just the tip of the iceberg to what a modern, constructive U.S. innovation policy must guarantee above all else, and that’s parity…equal and constructive policy treatment across the broadband ecosystem.

We need common-sense, light-touch rules that apply to everyone across the digital landscape. And, there are a couple of early poster children for the importance of this debate to everyone.

Cyberspace

In 2011, the Department of Defense declared cyberspace an "operational domain" that U.S. forces will be trained to defend.  Headlines virtually every day remind us just how mission-critical this theater of warfare has become.

The first wave of “great ideas” from government on this front revolved almost exclusively around our companies.  Our advocacy, with our many allies, but truly a multi-industry effort led for many years in no small part by USTelecom’s Robert Mayer has been focused on encouraging everyone to step back and see the big picture of potential vulnerabilities and workable solutions.

We led a successful effort to change the focus on improving cybersecurity not just around “core communications infrastructure” but the broader “Internet and communications ecosystem” that sweeps in edge and content providers.  

We also are focused on avoiding unnecessary obligations that single out our carriers, particularly smaller and mid-sized companies.  In fact, we just launched a small- and medium-sized company cybersecurity committee to address just this area—from bringing in the experts to share best practices to managing regulatory risk.

At the FCC, we have made important strides in curtailing the agency’s efforts to impose its own cybersecurity mandates, something Chairman Pai has dramatically scaled back.

The picture here is USTelecom’s ninth Cybersecurity Policy Forum convened in July and keynoted by White House Cybersecurity Coordinator Rob Joyce.  We continue to be very active with the media making clear that cybersecurity is THE model for effective public-private coordination on the most pressing issues before our nation today...a fixed, command-and-control approach simply will not work against such a dynamic foe.

And, I’d like to end on privacy. It’s a sleeping giant of an issue.  Not active right now but inevitably it will return.

Privacy is another clear-cut example of the need for rules that reflect the modern broadband ecosystem.  Earlier this year, we were successful in our efforts to get Congress to step in and block ill-conceived rules issued by the prior FCC leadership that singled out ISPs for heightened regulations—disregarding the clear consumer mandate for one set of uniform protections across the internet ecosystem.

All these companies on the left, among the most powerful online players with the deepest databases of consumers’ online activity, were untouched by the regulations.

We had dozens of meetings with members and offices and worked the media to get it done. And, USTelecom continues to work with congressional staff on a framework that applies equally to the entire internet ecosystem – ISPs and edge providers – and be subject to FTC enforcement.

It was a tall order to talk these flagrantly discriminatory rules back.  And, I think, along with the Title II progress we expect soon, it reflects a broader shift - what AOL Founder Steve Case recently called ‘a reckoning.’

Folks are starting to catch on to the disparities that exist today—between those companies that were around in 1934, those companies with deep roots investing in communities across this country, and the new kids on the block.

And, to be clear, we don’t want them, or anyone, mired in outdated rules.  But we do want—we do insist on—a modern, constructive and level playing field.

And despite the merits of our case, and the enormous public stake in broadband investment and deployment, we should be under no illusion that this progress will come without a fight.

And, if there’s one thing all this travel this year has left me very clear on, it’s that our not-so-secret weapon in this battle royale is all of you.

Your investment, your roots, your depth of commitment, particularly in rural areas, offers a constant contrast illuminating not what we’re fighting against—unfair, outdated rules, but serving as a perpetual reminder of what we are all fighting for—to connect our country, every family, and every community to life-changing, society-transforming innovation.

What Steve Case calls ‘the rise of the rest.’

We have Silicon Valley, Manhattan, and Austin.  But the true questions posed by the revolutionary technology you are bringing to Indiana, to Michigan, to Ohio are the ones all of you here are devoting your professional lives to helping answer: Why not us?  Why not here?  Why not now?

Connecting the country is no technical impossibility. It is a limitation imposed by policy, by a lack of adequate, collective willpower and determination. If we achieve this monumental task it will be because of your effort, work, investmen and commitment.  But you cannot do it alone.

That’s what USTelecom is here for. That’s what John and Charley and Scott and their teams are here for. And, the companies and individuals I represent could not be more proud or more motivated to stand shoulder-to-shoulder with you.  For those of you who are with us at USTelecom, thank you.  For those of you who are perhaps taking another look at us today, I appreciate your time and consideration and hope I’ve given you something to think about.  And, to all of you in our broadband community here in the Great Lakes region, thank you for your work. I understand we have a few minutes for questions, and I’m happy to take any you may have.

[1] John Koppin, President, Indiana Broadband and Technology Association; Charley Moses, President, Ohio Telecom Association; Scott Stevenson, President, Telecommunications Association of Michigan.  The three organizations do this event together.