Senate Commerce Committee Holds Hearing About Major Broadband Affordability Programs

6 months ago

The Senate Commerce, Science and Transportation Committee held a hearing entitled, "The Future of Broadband Affordability."

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Transcript

00:00:00 And we'll come to order.

00:00:04 Today the subcommittee is convening a hearing

00:00:06 on the future of broadband affordability.

00:00:09 So I want to thank our ranking member, Mr. Thune,

00:00:14 as well as Chair Catwell and ranking member Cruz

00:00:17 for working with me to schedule this hearing

00:00:19 on such an important topic.

00:00:21 I want to start with a story from one of my constituents.

00:00:26 Her name's Kelly,

00:00:28 and she's from a small community

00:00:30 by the name of Ranchos de Taos out in New Mexico.

00:00:34 Now she reached out to my office last month

00:00:37 about the importance of the Affordable Connectivity Program.

00:00:40 And here's what she said, quote,

00:00:43 "In my capacity as program manager

00:00:45 for New Mexico Veterans Upward Bound Program at UNM Taos,

00:00:50 my team and I serve veterans

00:00:53 in eight northern New Mexico counties

00:00:56 in some very rural areas.

00:00:58 We are finding it more difficult

00:01:00 to connect our native veterans

00:01:02 who may not even be aware of the benefits

00:01:05 that they've earned or are unable to apply for them

00:01:09 since most communications is via the internet.

00:01:13 My team is working on that.

00:01:15 Many live in extremely remote areas

00:01:17 and only receive phone or internet service

00:01:20 when they go into the nearest town.

00:01:23 That's not fair.

00:01:25 They are no less deserving of veteran benefits

00:01:27 than anyone else," end quote.

00:01:30 Now, I want to emphasize that point

00:01:34 because it's why we're here today.

00:01:36 The people who rely on the Affordable Connectivity Program

00:01:39 to connect with healthcare providers,

00:01:41 attend work or school, or access their benefits

00:01:44 are no less deserving

00:01:46 anywhere across America than anyone else.

00:01:52 There are still many areas across the country

00:01:54 where families have no options

00:01:56 for high-quality broadband service.

00:01:59 That's why we work together

00:02:00 to pass the bipartisan infrastructure law,

00:02:03 which included the Broadband Equity Access and Deployment,

00:02:07 otherwise known as the BEED Program,

00:02:09 to build out broadband networks in regions of our country

00:02:12 that have, until now, been left behind.

00:02:16 But building the network isn't the end of the story.

00:02:19 We have to make sure that people can afford to access it.

00:02:22 That is why we created the Affordable Connectivity Program

00:02:25 in a bipartisan way,

00:02:27 to help low-income families afford internet service

00:02:30 by contributing a $30-per-month benefit.

00:02:33 Right now, there are over 23 million households

00:02:36 participating in this program.

00:02:38 That's more than 55 million people.

00:02:41 But it's not only benefiting these individuals and families,

00:02:44 it's benefiting their local communities as well.

00:02:48 A study from the Benton Institute for Broadband and Society

00:02:51 published last month found that every dollar

00:02:53 that is put into ACP returns nearly $2 in impact

00:02:57 for the recipient of the benefit.

00:03:00 It gives families access to better-paying jobs,

00:03:03 to training and education, to create economic mobility,

00:03:08 to better deals on groceries and household goods.

00:03:11 It means stimulating our local economies.

00:03:14 So the time is now to save this program.

00:03:17 This last full month of funding for ACP,

00:03:21 we saw the expiration just a few days ago.

00:03:25 Now, each household will only receive a partial benefit

00:03:29 if Congress fails to act.

00:03:31 That will be the end of the Affordable Connectivity Program.

00:03:35 And mind you, all of these customers across America

00:03:39 received notices back in January as well

00:03:41 that this program was going away.

00:03:44 Congress had a little bit of time

00:03:45 to be able to fix things, to get this correct.

00:03:49 But here's another one where Congress

00:03:52 let the American people down.

00:03:54 My colleagues and I have been working to find a solution

00:03:56 to keep this program going.

00:03:58 Thank you to Chair Cantwell, who has introduced legislation

00:04:01 to restore the FCC's auction authority

00:04:04 and use $7 billion in auction proceeds

00:04:07 to keep this program alive.

00:04:09 And thank you to Senators Welch and Senators Vance,

00:04:13 who have introduced legislation to fund the program

00:04:16 through the end of the year with appropriations.

00:04:19 They're both strong proposals

00:04:20 to temporarily fund the program

00:04:22 and give Congress time to find a long-term solution

00:04:25 so we don't face this cliff every six months or every year.

00:04:29 Now, the Universal Service Fund Working Group

00:04:32 that I've been proud to be a part of

00:04:34 and lead with Ranking Member Thune

00:04:37 has been working on a long-term solution.

00:04:40 Once we save this program in short term, I believe,

00:04:43 I'm looking forward to bringing a solution to this committee

00:04:47 that provides a permanent funding mechanism,

00:04:49 modernizing programs, looking at what the out years

00:04:53 will certainly look like here

00:04:55 to earn bipartisan support in both chambers.

00:04:58 And I'm very proud that this Working Group

00:05:00 has had participation from members of the Senate,

00:05:02 members of the House, and members of leadership.

00:05:05 It's really been incredible to see how these thoughts

00:05:09 and these ideas and embracing some of those differences

00:05:13 actually shows where we agree on how to get this achieved.

00:05:18 So I very much appreciate that.

00:05:20 Now, it would be a significant waste of government funds

00:05:23 to let this program lapse.

00:05:25 It would mean letting all the time and resources

00:05:28 the federal government and our state and local partners

00:05:30 have put into standing up the program

00:05:32 and enrolling 23 million households go to waste.

00:05:36 I'm looking forward to hearing from our panel of witnesses

00:05:39 who will provide clear evidence

00:05:41 that we are on the brink of wasting

00:05:43 significant federal investments

00:05:44 and causing real harm to our constituents.

00:05:47 Each will share their perspective on the role

00:05:50 that the Affordable Connectivity Program

00:05:51 plays in our economy

00:05:53 and in the lives of low-income families across the country.

00:05:57 Now, our panelists, we're going to hear

00:05:59 from Ms. Jennifer Case-Nevarez,

00:06:01 who is the director and lead educator

00:06:03 of Community Learning Network

00:06:04 and member of the Broadband and Digital Equity Support Team

00:06:08 for New Mexico and the Office of Broadband Access

00:06:10 and Expansion.

00:06:11 I'm proud that Ms. Nevarez has joined us this morning

00:06:14 all the way from Santa Fe, New Mexico

00:06:16 to share what she's seen on the ground

00:06:18 and the importance of ACP

00:06:20 and the consequences if we let it lapse.

00:06:22 Ms. Catherine DeWitt,

00:06:24 project director of the Broadband Access Initiative

00:06:26 at the Pew Charitable Trust,

00:06:28 who will speak to the economic importance of ACP

00:06:31 to families across this country.

00:06:34 Mr. Blair Levin, policy advisor at New Street Research

00:06:38 and non-resident senior fellow at Brookings Metro,

00:06:42 who will speak to the economic impact

00:06:44 of a potential ACP lapse across our economy.

00:06:47 And Dr. Paul Winfrey, president and CEO

00:06:51 of the Economic Policy Innovation Center,

00:06:54 who Ranking Member Thune will introduce.

00:06:57 Now, I look forward to hearing from each of you,

00:06:59 and I now want to recognize Ranking Member Thune

00:07:02 for his opening statement.

00:07:04 We're going to hear first from the ranking member

00:07:06 of the full committee, Senator Cruz of Texas.

00:07:10 Senator Cruz.

00:07:10 - Thank you, Mr. Chairman.

00:07:13 Thank you to Ranking Member Thune,

00:07:15 and thank you to our witnesses today.

00:07:18 The United States is the standard bearer

00:07:20 for high-speed internet connectivity.

00:07:22 During the pandemic,

00:07:24 American internet providers significantly outperformed

00:07:27 our more highly regulated European counterparts

00:07:31 with faster and more competitive service.

00:07:34 Yet this highly functioning industry

00:07:36 is under relentless attack by the Biden administration.

00:07:41 Despite being handed a generational opportunity

00:07:44 to connect all Americans,

00:07:46 this administration has made it clear

00:07:48 they would prefer to assert

00:07:50 government control of the internet.

00:07:53 This was epitomized by last week's FCC party-line vote

00:07:57 to subject the broadband industry

00:07:59 to an oppressive regulatory regime

00:08:02 under the pretense of so-called net neutrality.

00:08:06 This follows the FCC's digital equity power grab

00:08:10 late last year,

00:08:12 in which the agency asserted control

00:08:14 over nearly every aspect of the broadband business

00:08:17 and opened providers to expansive, indeterminate,

00:08:20 and crippling liability under a disparate impact standard.

00:08:24 The Biden administration claims

00:08:26 that it wants to improve broadband affordability

00:08:29 for American families,

00:08:31 but the FCC is sabotaging these goals.

00:08:34 What happens when companies need to divert

00:08:37 significant resources towards complying

00:08:41 with woke Biden priorities over their customers?

00:08:45 Prices go up, investment and innovation declines,

00:08:50 and Americans suffer.

00:08:52 And we know this from experience.

00:08:54 When the Obama FCC imposed Title II on broadband,

00:08:58 their first iteration of net neutrality in early 2015,

00:09:02 capital expenditures fell by $500 million that year

00:09:07 and by another $2.7 billion in 2016.

00:09:11 That hurts American consumers across the country.

00:09:13 We see similar trends

00:09:16 in the Biden administration's mismanagement

00:09:19 of Congress's massive broadband investments,

00:09:23 over $125 billion in the last four years.

00:09:28 The Biden NTIA has prioritized woke social policies,

00:09:33 union mandates, tech biases, and price controls

00:09:37 at the expense of delivering high-speed internet

00:09:40 to unserved Americans.

00:09:42 The largest of these programs,

00:09:44 a $42 billion broadband infrastructure program,

00:09:49 is already being waylaid.

00:09:51 Biden administration officials are withholding

00:09:54 and delaying funding from states like Virginia,

00:09:57 where Governor Yunkin's team is standing up

00:10:01 to the coercive and lawless demands

00:10:04 of the Biden administration.

00:10:06 Likewise, the Affordable Connectivity Program

00:10:09 is not working as Congress intended.

00:10:12 To assist those for whom cost was the barrier

00:10:15 to gaining internet access,

00:10:17 ACP, which gives a $30 monthly subsidy for internet service,

00:10:22 and $75 per month if you're on tribal lands,

00:10:27 was given a record $14 billion budget.

00:10:32 This was anticipated to last several years.

00:10:35 But the FCC deliberately oversubscribed the program,

00:10:38 blowing through the money in record time.

00:10:40 We have heard from the White House

00:10:43 and from Chairman Rosenworcel

00:10:45 that this massive welfare program

00:10:47 should be considered a success

00:10:50 because 23 million households enrolled in it.

00:10:53 But it turns out the vast majority of these people

00:10:56 already had high-speed internet.

00:10:59 Here's an FCC survey showing that just 22%

00:11:05 of the households receiving the taxpayer subsidy

00:11:09 were previously unsubscribed to broadband.

00:11:12 This means that for every household

00:11:14 that didn't subscribe to premium internet,

00:11:17 the federal government is subsidizing

00:11:20 four households that did.

00:11:22 Beyond this massive inefficiency and waste,

00:11:26 reports have also found, unsurprisingly,

00:11:29 that the ACP has had inflationary effects

00:11:33 on the price of internet.

00:11:35 One of our witnesses, Dr. Paul Winfrey,

00:11:38 analyzed the data and found that in places

00:11:40 where ACP enrollment is the highest, we see higher prices.

00:11:45 A less technical but no less telling report

00:11:47 from the National Review used archive records

00:11:51 from the internet to show that companies

00:11:53 treat the $30 subsidy now as the new price floor.

00:11:57 Companies that used to offer broadband plans

00:12:00 for $10 or $15 a month now charge $30

00:12:04 for the same or marginally upgraded service.

00:12:07 History has shown that when the federal government

00:12:10 starts subsidizing demand in higher education

00:12:13 and agriculture, the subsidy gets capitalized

00:12:17 and prices go up.

00:12:19 After all, why would corporations ever

00:12:22 leave free money on the table?

00:12:23 While those who receive the subsidy

00:12:26 may realize an immediate cost reduction,

00:12:29 the market prices rise for everybody else.

00:12:33 This rising price creates a call for more subsidies

00:12:36 and higher taxes to fund those additional higher subsidies

00:12:40 and eventually a government takeover of the internet

00:12:42 to provide it for free.

00:12:44 To the extent there are truly indigent people

00:12:48 who cannot afford connectivity,

00:12:49 there is a program already designed for them.

00:12:51 It's called Lifeline.

00:12:52 If it's not working well, we should look to improve it.

00:12:57 Not to impose higher taxes on millions

00:13:00 of hardworking Americans to cover the internet bills

00:13:03 of their neighbors who are already willing

00:13:06 and able to pay for it themselves.

00:13:08 I'm open to a discussion on these reforms.

00:13:12 The road to broadband as a publicly regulated utility

00:13:15 is not one Americans can afford.

00:13:18 To ensure that all Americans can access and benefit

00:13:21 from high-speed connectivity,

00:13:23 the administration should reverse course,

00:13:26 abandon toxic regulatory mandates,

00:13:28 remove unnecessary barriers to investment,

00:13:31 and ensure federal broadband subsidies

00:13:34 are working as Congress intended.

00:13:36 An innovated and an affordable broadband future

00:13:39 can only be achieved if the federal government

00:13:42 puts Americans' prosperity over its urge

00:13:46 to assert regulatory control.

00:13:49 Thank you.

00:13:50 - Thank you, Senator Cruz.

00:13:52 Now I recognize the ranking member of the subcommittee,

00:13:54 Mr. Thune, for his opening statement.

00:13:56 - Thank you, Mr. Chairman,

00:13:57 and I appreciate the opportunity to work with you

00:14:00 on the working group.

00:14:01 I think there are a number of areas

00:14:03 in the Universal Service Fund programs

00:14:09 that have been needed oversight and reform

00:14:12 and looking at ways that we can

00:14:14 make those work more efficiently.

00:14:17 And so I look forward to our continued efforts

00:14:19 in that regard.

00:14:21 And thank you for having the hearing this morning.

00:14:23 Thank you to all our witnesses for being here.

00:14:26 Let me start by saying that an internet connection

00:14:30 provides significant opportunities to run a business,

00:14:33 provide healthcare, or do homework.

00:14:36 And as a member who represents a rural state,

00:14:39 I remain committed to the bipartisan principle

00:14:41 of universal service in ensuring that Americans

00:14:43 in all parts of the country have access

00:14:44 to communication services comparable in quality

00:14:47 and price to those in urban areas.

00:14:50 Today we're here to examine the state

00:14:53 of broadband affordability programs.

00:14:57 The FCC has a long history with broadband affordability

00:15:00 through its Lifeline program, as has been mentioned,

00:15:03 which despite existing for nearly 40 years

00:15:05 has not been a broad success story.

00:15:08 A carefully designed, properly administered

00:15:10 broadband affordability program to help those Americans

00:15:13 who without a subsidy would be unable to afford

00:15:15 reasonable level of connectivity

00:15:18 is an important part of universal service.

00:15:21 But unfortunately, the FCC's Lifeline program,

00:15:23 which is currently part of the Universal Service Fund,

00:15:26 has not lived up to this promise.

00:15:28 The rampant waste, fraud, and abuse

00:15:30 within the Lifeline program

00:15:32 has been well documented over the years.

00:15:34 Unfortunately, much like the FCC's Lifeline program,

00:15:37 the Affordable Connectivity Program, or ACP,

00:15:40 seems to be plagued with similar inefficiencies.

00:15:43 ACP, what initially began as a program

00:15:46 to help consumers stay connected during the pandemic,

00:15:48 was expanded, as many government programs tend to be,

00:15:51 into a much broader and much more expensive program.

00:15:55 As is currently designed, ACP does a poor job

00:15:58 of directing support to those who truly need it,

00:16:00 namely those who would not get service without a subsidy.

00:16:04 With overly broad eligibility criteria,

00:16:07 ACP allows over 40% of American households

00:16:11 to receive a subsidy.

00:16:14 If all of the eligible households were enabled,

00:16:17 or I should say were enrolled into ACP,

00:16:19 the program would cost the taxpayer

00:16:21 over $19 billion annually.

00:16:24 The inefficiencies in both Lifeline and ACP

00:16:26 are in large part a direct result of the FCC's failure

00:16:29 to set performance goals and address the fundamental question

00:16:32 of whether or not either of these programs

00:16:35 are an effective means of increasing adoption

00:16:37 among low-income consumers.

00:16:39 Without performance goals, we have no evidence

00:16:42 to support that ACP or Lifeline are effective

00:16:47 in connecting non-subscribers to the internet.

00:16:50 The FCC's own survey, Senator Cruz pointed out,

00:16:53 indicates that at least, or I should say at best,

00:16:56 about 22% of the current ACP subscribers

00:17:00 did not have an internet connection prior to ACP.

00:17:04 It is imperative that the FCC conduct such an analysis

00:17:07 so that we can make informed decisions

00:17:09 on the future of broadband affordability programs

00:17:11 for truly low-income Americans.

00:17:14 And simply saying 23 million households will lose broadband

00:17:17 if ACP does not receive new funding

00:17:20 is not undertaking a fundamental analysis.

00:17:23 The American people deserve better,

00:17:25 and we need an honest assessment

00:17:26 of how to best deliver services to those actually in need.

00:17:31 To that end, I appreciate Senator Lujan's work

00:17:33 leading the USF Working Group with me

00:17:36 and other members of this committee

00:17:37 to address the needs and shortfalls of the USF programs.

00:17:41 We also must recognize the federal government

00:17:43 will not solve the digital divide on its own.

00:17:46 United States' light regulatory,

00:17:48 or light-touch regulatory approach to broadband policy

00:17:51 has resulted in telecommunications providers

00:17:54 in South Dakota and the rest of the country

00:17:55 making network reliability, affordability,

00:17:58 and resiliency a priority.

00:18:01 During the pandemic, when demand for reliable internet soared,

00:18:05 US broadband providers were able to keep Americans connected,

00:18:09 which was not the case in other countries.

00:18:12 And now as ACP winds down,

00:18:13 I appreciate how the private sector is stepping up,

00:18:16 turning to low-income programs they offered prior to ACP.

00:18:20 The White House and some in Congress

00:18:22 have called on companies to continue offering free service

00:18:26 to consumers despite ACP dollars running out.

00:18:29 This, of course, is akin to rate regulation

00:18:32 and demonstrates what Democrats have wanted all along.

00:18:37 The efforts to promote quality and affordable broadband

00:18:39 are under attack by the Biden FCC.

00:18:43 Just last week, the FCC once again

00:18:45 asserted broad new government powers over the internet

00:18:48 using rules that were designed for telephone monopolies

00:18:51 back during the Great Depression.

00:18:54 The last time these heavy-handed regulations were imposed,

00:18:58 as Senator Cruz pointed out, broadband investment declined,

00:19:02 and there's good reason to believe this will happen again.

00:19:05 These new rules would also imperil the United States'

00:19:07 position at the forefront of internet innovation.

00:19:10 Biden's FCC should be focused on addressing real challenges,

00:19:14 such as reducing regulatory burdens

00:19:16 and thus the cost for broadband,

00:19:18 not searching for a problem where one doesn't exist.

00:19:22 Before I close, I'd also like to add

00:19:25 that I hope we can hear from the FCC directly

00:19:29 about their broadband affordability programs

00:19:31 and many other important issues.

00:19:33 It's unacceptable that this committee

00:19:36 has not held an oversight hearing of the FCC

00:19:38 for over 1,400 days.

00:19:41 I appreciate each of our witnesses for being here today

00:19:44 and look forward to the discussion.

00:19:45 Thank you, Mr. Chairman.

00:19:46 Yes, and Dr. Winfrey is our fourth witness.

00:19:53 He's president and CEO of Economic Policy Innovation Center.

00:19:56 He's an economist, trusted policy, public policy advisor,

00:20:00 and served in top management and policy roles

00:20:02 in the White House, the U.S. Senate, and in think tanks.

00:20:04 So it's great to have you here,

00:20:06 along with the rest of our panel of witnesses.

00:20:08 We look forward to hearing from you all.

00:20:09 Thank you.

00:20:10 - Thank you very much, Mr. Thune.

00:20:12 And before I recognize myself for five minutes of questions,

00:20:15 I want to wish Peter Welch a happy birthday.

00:20:19 So if everyone might be able to just give him

00:20:21 a round of applause, please, and show our appreciation

00:20:25 to Senator Welch.

00:20:26 - He's a pretty nice guy, but I appreciate the embarrassment.

00:20:35 - Thank you, my friend. - Thank you, Ben Ray.

00:20:39 - So before I recognize myself for questions,

00:20:41 I want to make sure that we hear

00:20:42 from our distinguished panel as well.

00:20:45 So, Ms. Navarez, you'll begin,

00:20:47 and each of you will be recognized for five minutes as well.

00:20:49 You'll be able to submit your full testimony

00:20:52 into the record as well.

00:20:52 Ms. Navarez, you're recognized.

00:20:55 - Santa Fe, New Mexico.

00:21:01 As director of Community Learning Network,

00:21:03 an educational nonprofit dedicated to building

00:21:06 stronger communities through real-life learning,

00:21:08 and a member of the Broadband and Digital Equity

00:21:10 Support Team for the New Mexico Office of Broadband,

00:21:14 I have traversed the state,

00:21:16 met with hundreds of constituents,

00:21:17 and I'm here today to share community concerns

00:21:19 and to highlight the urgent need for Congress to act now,

00:21:23 to extend ACP before it lapses completely.

00:21:26 Though many think the internet is all about technology,

00:21:29 it is actually about connecting people.

00:21:32 A Diné Navajo elder I work with,

00:21:34 who lives on a fixed income on a farm in rural New Mexico,

00:21:38 with the end of ACP and broadband access and affordability

00:21:41 out of reach for many rural residents,

00:21:45 she and many others like her

00:21:46 will go without internet connectivity at home,

00:21:49 and in her case, will do what she has done before

00:21:52 to get online, drive 52 miles to check her email

00:21:55 at the public library.

00:21:57 With the end of ACP, more than 23 million households

00:22:00 are now at risk of losing their internet connectivity.

00:22:03 Nearly half are military families,

00:22:07 and 10 million are over the age of 50,

00:22:10 with seniors reporting that they rely heavily

00:22:12 on the internet to coordinate and track medical services,

00:22:16 overcome isolation, and deal with the fact

00:22:18 that they may no longer be able to drive.

00:22:21 320,000 are households on tribal lands,

00:22:24 where high-speed internet is generally more expensive.

00:22:28 In New Mexico, more than 184,000 households

00:22:32 face losing their ability to pay bills, purchase goods,

00:22:35 check health portals, run small businesses,

00:22:38 and do work or schoolwork online.

00:22:40 In Congressional District 2,

00:22:42 28% of all households are enrolled in ACP,

00:22:46 so one of every four households

00:22:49 are now at risk of losing connectivity.

00:22:51 This is a terrible blow to the local economy

00:22:54 and a terrible setback for local families

00:22:56 and the counties where they live.

00:22:58 With families facing hard decisions about what to cut,

00:23:01 finding an affordable alternative is not easy,

00:23:05 especially in rural areas

00:23:06 where there may only be one provider,

00:23:08 where costs can be much higher,

00:23:10 and where low-cost options may be unreliable or inadequate

00:23:14 for whole families working or learning from home.

00:23:16 As the fifth-largest state

00:23:19 and the sixth-lowest in population density,

00:23:22 deploying fiber in New Mexico is extra costly.

00:23:25 Subscriber pools are smaller and more scattered,

00:23:29 and networks are difficult to maintain.

00:23:31 For us in New Mexico, for our economy, for our health,

00:23:35 for the well-being of our families, our communities,

00:23:37 and our internet service providers,

00:23:39 every subscriber counts.

00:23:41 Subscribers are especially critical

00:23:44 for our small, tribal, and rural communities

00:23:46 who have leveraged investments

00:23:48 and built networks and companies

00:23:49 to provide valuable internet service

00:23:52 in hard-to-reach areas

00:23:53 where they are often the only option.

00:23:55 These local providers often run on tight margins

00:23:58 with higher expenses to serve low-density areas

00:24:01 with lower-income customers.

00:24:04 They are at a higher risk of bankruptcy

00:24:06 without a reliable and consistent pool

00:24:08 of active subscribers.

00:24:10 Thanks to collaborative investment and ACP outreach,

00:24:13 local networks and providers

00:24:15 have been building relationships and trust

00:24:17 while growing their customer base.

00:24:19 The end of ACP now,

00:24:21 after just over two years of getting going,

00:24:24 and the loss of subscribers

00:24:25 puts the BEAD initiatives in jeopardy

00:24:27 and some local networks at risk of failure,

00:24:31 especially in areas that are most in need

00:24:34 and serving some of the hardest-to-reach

00:24:36 and traditionally underserved,

00:24:37 disconnected community members.

00:24:39 We cannot overlook the massive investment

00:24:42 and administrative burden of standing up ACP

00:24:45 and coordinating more than 1,500 internet service providers

00:24:50 and 23 million subscribers through enrollment.

00:24:53 To let ACP die now feels wasteful and irresponsible.

00:24:57 To let it lapse feels short-sighted

00:24:59 and irreverent of both its current success,

00:25:02 23 million subscribers in just over two years,

00:25:06 and the massive investment of time,

00:25:08 energy, and money by everyone.

00:25:11 Right now, confusion abounds.

00:25:13 Congress is losing credibility,

00:25:15 and local service providers

00:25:17 are losing customers and public trust.

00:25:19 So what now?

00:25:20 Are we really going to let 23 million households

00:25:23 drop out of the internet economy

00:25:25 and disappear from the digital world?

00:25:28 Mayors and governors, both Republicans and Democrats,

00:25:30 have publicly prioritized ACP

00:25:33 and made it a part of their plan

00:25:34 to close the digital divide.

00:25:36 Affordable, reliable internet

00:25:38 is more than a bipartisan issue.

00:25:40 It is a people issue with real-world impact

00:25:43 on health and wealth for Americans.

00:25:45 Moreover, it is rare but inspiring

00:25:47 when government, community, and industry align.

00:25:50 So why align?

00:25:52 As aptly noted by one of our leaders in the community,

00:25:54 broadband is everybody's business.

00:25:57 Broadband is an essential service for everyone.

00:26:00 ACP was established to address the critical needs

00:26:03 to connect everyone,

00:26:04 and 23 million enrollment was a monumental feat

00:26:08 and a success we should not waste.

00:26:11 Meanwhile, ACP use is widespread

00:26:13 and directly impacts our constituents.

00:26:16 Urban, suburban, and rural communities rely on ACP

00:26:19 to pay for the high-speed internet service they need,

00:26:22 for school, work, healthcare, essential services, and more.

00:26:25 Most importantly, we all lose when ACP ends.

00:26:28 The end of ACP puts networks, local ISPs,

00:26:31 and beat infrastructure investment at risk

00:26:34 and erodes public trust.

00:26:36 Since we just got started, quitting now would be a waste.

00:26:39 In closing, I echo the understanding

00:26:41 that people and places thrive when everyone can participate.

00:26:45 Economies thrive when everyone can participate.

00:26:49 So I ask everyone in this room,

00:26:51 do you use a cell phone, computer, or laptop?

00:26:54 Do you have internet access right now?

00:26:57 As we face the end of ACP,

00:27:00 I would like you to join more than 23 million households

00:27:03 in an experiment.

00:27:04 Turn off your devices

00:27:07 and go without using the internet for the next five minutes,

00:27:10 five hours, or five days.

00:27:12 Yes, give it a try while reflecting on how

00:27:15 the rest of your day and life will be impacted.

00:27:18 Let this sink in, and then let's not let

00:27:21 more than 23 million households and families disappear

00:27:24 from the digital economy.

00:27:26 Congress has the power to act now

00:27:28 to keep those constituents connected.

00:27:30 And I am here to remind you today

00:27:32 that the health and well-being of Americans,

00:27:33 as well as the economic vitality

00:27:36 and security of our nation, depend on it.

00:27:38 - Ranking member Cruz, Chairman Lujan,

00:27:48 and ranking member Thune,

00:27:49 as well as members of the subcommittee,

00:27:51 thank you very much for inviting me

00:27:52 to testify in today's hearing.

00:27:54 Also, a very happy birthday to Senator Welch.

00:27:57 My name is Catherine DeWitt,

00:27:59 and I am the project director

00:28:00 for the Broadband Access Initiative

00:28:02 at the Pew Charitable Trusts.

00:28:04 Pew is a non-profit, non-partisan,

00:28:06 evidence-based organization,

00:28:08 and for more than 75 years,

00:28:09 we have used data to make a difference.

00:28:12 My team works directly with broadband offices

00:28:15 from 36 states and territories

00:28:16 to help them navigate this unprecedented moment,

00:28:19 the largest federal investment

00:28:21 in affordable broadband access

00:28:22 in our nation's history.

00:28:24 The Affordable Connectivity Program,

00:28:26 also known as ACP, is essential to this work.

00:28:29 Achieving universal broadband requires two things.

00:28:34 First, our supply-side solutions,

00:28:36 steps that reduce the cost of building networks

00:28:39 and delivering service to American homes.

00:28:42 Second, our demand-side interventions

00:28:44 that reduce the cost of broadband for consumers,

00:28:47 particularly low-income and vulnerable households.

00:28:51 We tried, if you build it, they will come,

00:28:54 but the COVID-19 pandemic demonstrated

00:28:57 why that approach will not get us to the finish line.

00:29:00 We witnessed in real time

00:29:02 how tens of millions of Americans

00:29:04 struggled to work, learn, and access healthcare

00:29:07 because they did not have reliable

00:29:09 or high-quality internet.

00:29:11 Why?

00:29:12 For some, it was too expensive.

00:29:14 For others, it was simply unavailable.

00:29:16 Congress took swift action to address this,

00:29:20 including dedicating funding

00:29:22 to immediately bring vulnerable households online,

00:29:25 and it worked.

00:29:26 23 million households participate in the ACP today,

00:29:30 including almost half of those families

00:29:33 are military families,

00:29:35 and 19% are 65 and older.

00:29:38 In Texas alone, 1.7 million households

00:29:41 benefit from the program.

00:29:43 In Michigan, more than 410,000 households are enrolled.

00:29:47 These numbers are a remarkable testament

00:29:49 to the response from internet service providers,

00:29:51 the public sector, and community partners

00:29:54 across the country.

00:29:55 Second, Congress established

00:29:58 two important deployment initiatives,

00:30:00 the Capital Projects Fund

00:30:01 and the Broadband Equity Access and Deployment Program,

00:30:04 also known as BEAD.

00:30:06 But for the first time,

00:30:07 Congress addressed those supply and demand barriers together

00:30:11 by conditioning eligibility for deployment grants

00:30:14 on participation in an affordability program.

00:30:16 In other words, Congress took steps to ensure

00:30:20 that 52 billion in taxpayer funds

00:30:23 would support networks that would be available

00:30:25 and affordable to consumers,

00:30:27 whether they were rural, veterans,

00:30:30 or aging Americans living on a fixed income.

00:30:32 ACP is currently the best tool we have

00:30:36 to bridge the digital divide

00:30:37 because it alleviates cost burden on households

00:30:40 and increases certainty for the providers

00:30:42 that we need to connect every American.

00:30:44 In fact, all 50 states have incorporated ACP

00:30:47 into their deployment strategies

00:30:49 for capital projects and BEAD.

00:30:52 States are actively administering these programs right now,

00:30:56 but ACP's potential end is introducing risk

00:30:59 to states, providers, and consumers

00:31:01 at a critical moment in implementation.

00:31:04 We all know that broadband is complicated.

00:31:08 States have expressed concerns about a range of challenges,

00:31:11 from permitting to workforce shortages.

00:31:13 But for more than a year,

00:31:15 state broadband offices have raised alarms

00:31:17 about the end of ACP,

00:31:19 and providers of all types have expressed hesitation

00:31:22 about participating in BEAD if ACP goes away.

00:31:25 That is why we asked Congress to act quickly

00:31:28 and decisively to keep ACP funded.

00:31:31 Ohio's digital equity plan notes

00:31:33 that the end of ACP will abruptly disrupt access

00:31:36 to affordable internet that low-income Ohioans

00:31:39 rely on for education, work, and healthcare.

00:31:42 That concern is echoed by other program recipients.

00:31:46 A recent survey found that 68% of enrolled military families

00:31:51 were concerned about missing out on job opportunities.

00:31:54 72% of enrolled Americans over 65

00:31:58 are worried about losing access to healthcare.

00:32:01 95% of all participants said they would struggle

00:32:04 with other household costs, including groceries,

00:32:07 utilities, housing, and healthcare.

00:32:08 ACP should be improved to better reach

00:32:12 the households that need it,

00:32:13 and ensure that taxpayers are being protected

00:32:15 from waste, fraud, and abuse.

00:32:17 We must extend ACP at the next legislative opportunity

00:32:22 if we want $52 billion in taxpayer money

00:32:25 to support broadband that Americans can use

00:32:28 for access to education, healthcare,

00:32:30 job opportunities, and more.

00:32:32 There is no time to waste.

00:32:33 Thank you.

00:32:34 - Thank you, Ms. DeWitt.

00:32:36 Mr. Levin, you're recognized for your opening statement.

00:32:39 - Thank you very much, Chair Lujan,

00:32:41 Reiki Mende, and Chair Welch,

00:32:44 and other members of the subcommunity.

00:32:46 Thank you for inviting me to today's hearing.

00:32:48 My name is Blair Levin.

00:32:49 I'm an equity analyst with New Street Research

00:32:51 and a non-resident fellow at Brookings,

00:32:53 but I'm speaking solely for myself.

00:32:56 Today, I'd like to explain why ACP should be extended

00:32:58 and then, as part of a larger universal service fund reform,

00:33:02 be maintained with whatever modifications

00:33:04 Congress deems wise.

00:33:06 First, the cost of digital exclusion

00:33:08 is already large and growing,

00:33:09 with AI certain to magnify those costs.

00:33:12 In 2010, the National Broadband Plan documented

00:33:15 how the cost of digital exclusion was large and growing.

00:33:18 In March 2020, the United States,

00:33:20 in an overwhelmingly bipartisan manner,

00:33:23 saw that cost and agreed it was unacceptable.

00:33:26 The pandemic has largely ended,

00:33:27 but the shift to online delivery of essential services

00:33:30 and the need for connectivity to participate

00:33:32 in the economy has not,

00:33:34 and the coming wave of AI will magnify those costs.

00:33:37 Second, despite that knowledge,

00:33:39 our country is about to take the greatest step backwards

00:33:41 any country has ever taken to widen,

00:33:43 not close the digital divide.

00:33:45 Third, the cost of that disconnection

00:33:49 will be extraordinarily painful to individuals and families.

00:33:52 My fellow witnesses have already testified

00:33:54 that how ACP recipients would be harmed

00:33:56 by the program's demise.

00:33:58 I will not repeat their powerful testimony

00:34:00 instead I will focus on the cost to all of us.

00:34:04 And that leads me to the fourth point.

00:34:06 Digital disconnection will impose an immediate cost

00:34:09 on our economy shrinking economic growth.

00:34:12 My written testimony cite studies demonstrating

00:34:15 how the program increases earnings

00:34:16 for low-income households and increases GDP.

00:34:20 It is no surprise therefore that business groups

00:34:22 overwhelmingly support the extension.

00:34:25 Fifth, the loss of the ACP will raise the cost

00:34:28 of government-provided healthcare

00:34:30 and worsen healthcare outcomes.

00:34:34 Numerous studies demonstrate that telehealth

00:34:36 can lower costs and improve outcomes in many circumstances,

00:34:40 including cancer, maternal mortality, opioid treatment,

00:34:44 and emergency room visits.

00:34:46 ACP opens the door to improving healthcare outcomes

00:34:50 while lowering costs for Medicaid, Medicare, and the VA.

00:34:53 Alternatively, the end of ACP is likely to cause

00:34:57 increased healthcare costs and worse health outcomes.

00:35:00 Why would we want to do that?

00:35:03 Sixth, the loss of ACP will raise the cost of government

00:35:06 and diminish its performance in other areas as well.

00:35:09 The story of broadband in healthcare is repeated

00:35:12 in other areas where government is the key investor,

00:35:14 including job training, job placement,

00:35:16 education, and other social services.

00:35:19 This is not surprising.

00:35:21 Broadband is a general-purpose technology.

00:35:24 It enables innovations and efficiencies

00:35:26 in multiple areas.

00:35:28 In 2013, Google's chief economist estimated

00:35:31 that the internet already generated $500

00:35:34 in consumer surplus per user annually,

00:35:37 citing multiple different kinds of savings.

00:35:40 And it logically follows because many low-income households

00:35:44 are so dependent on government programs,

00:35:46 the consumer surplus that ACP recipients obtain

00:35:49 also creates a surplus for the government

00:35:53 through those programs.

00:35:54 So again, why would we want our investments

00:35:57 to be less effective and more expensive?

00:36:00 Seventh, the loss of ACP will particularly hurt

00:36:03 rural areas and military families.

00:36:05 Of others noted, rural areas in particular

00:36:07 benefit from ACP.

00:36:09 I cite several in my written testimony.

00:36:12 Let me illustrate with one more.

00:36:14 Rural areas are suffering from a growing epidemic

00:36:17 of hospital closures, and that makes

00:36:19 telehealth even more essential.

00:36:23 And as Mr. Witt noted, losing ACP would reduce

00:36:26 the value of BED deployment dollars,

00:36:28 meaning that communities that could have been

00:36:30 connected to fiber will end up connected

00:36:33 with fixed wireless or even satellites.

00:36:35 Eighth, every negative consequence I've mentioned

00:36:38 will be made worse as AI becomes embedded

00:36:41 in our economy and society.

00:36:43 Ninth, the administrative cost of shutting down

00:36:46 and starting up again is high.

00:36:47 It will be a huge waste to shut ACP down

00:36:50 and incur, as we would inevitably do,

00:36:52 the startup costs again.

00:36:54 In sum, losing ACP will result in slower economic growth,

00:36:58 increases in the cost of healthcare, education,

00:37:01 job training and placement, and other social services,

00:37:04 while decreasing the effectiveness of those services.

00:37:07 I know I'm a Democratic witness,

00:37:09 but let me just close by endorsing the letter

00:37:12 20 House Republicans sent Speaker Johnson

00:37:15 asking for action on ACP, saying,

00:37:18 "Bipartisan solutions are within reach

00:37:20 "to ensure uninterrupted access to the ACP,

00:37:23 "while concurrently pursuing long-term funding strategies."

00:37:27 I completely agree.

00:37:28 Let's adopt a clean extension,

00:37:30 and then reform the entire Universal Service Fund

00:37:33 to put it and ACP on a sustainable basis.

00:37:36 Thank you.

00:37:37 - I appreciate that, Mr. Levin.

00:37:38 Thank you very much.

00:37:39 Dr. Winfrey, you're recognized for five minutes.

00:37:41 - Thank you very much, Chairman Lujan,

00:37:43 Ranking Member Thune, members of the committee.

00:37:44 I was thinking about using my five minutes

00:37:46 to sing Happy Birthday to Senator Welsh,

00:37:49 but I don't think anybody wants that.

00:37:51 Like the development of canals and railroads

00:37:54 in the 19th century and highways in the 20th century,

00:37:56 access to affordable high-speed internet

00:37:58 will determine regional development,

00:38:00 as well as America's ability to continue to grow

00:38:02 by leading the world in innovation.

00:38:04 Fortunately, policymakers have paid

00:38:06 an incredible amount of attention

00:38:07 to the issue of broadband affordability

00:38:09 over the past decade.

00:38:10 This has led to many new policies

00:38:12 that we can use as guidance.

00:38:14 These policies include deregulation,

00:38:16 as well as subsidizing the demand for high-speed internet

00:38:18 and the supply of internet service providers, or ISPs.

00:38:21 We have learned that deregulation and competition

00:38:24 have reduced prices.

00:38:26 We have also learned that policies subsidizing demand

00:38:28 can increase prices if they do not fundamentally change

00:38:30 the demand for high-speed internet or the supply of ISPs.

00:38:33 Experience has demonstrated that deregulation

00:38:36 can produce significant gains for consumers,

00:38:38 especially when it enhances transparency

00:38:40 by increasing the scale on which providers

00:38:42 can compete on price and the quality of services.

00:38:44 One recent case of how deregulation reduced prices

00:38:47 was in 2017, when Congress nullified a rule

00:38:49 enacted by the FCC regarding consumer data sharing.

00:38:53 Before the FCC's 2016 rule, companies designed plans

00:38:57 that allowed consumers to opt in or out of data sharing

00:38:59 at different subscription rates.

00:39:01 Those who chose to opt in paid lower rates

00:39:03 than those who decided to opt out.

00:39:06 But in 2016, the FCC enacted a rule

00:39:08 requiring consumers to opt in.

00:39:11 Congress nullified this rule

00:39:12 using the Congressional Review Act process.

00:39:15 The results created more options at different price points

00:39:17 for consumers.

00:39:18 The 2020 Economic Report of the President

00:39:20 found that the CRA reduced wireless prices

00:39:23 by more than 10% and wired prices by as much as 2%.

00:39:27 At the same time, subsidizing demand can increase prices,

00:39:30 especially when the unemployment rate is high

00:39:32 and the underlying inflation rate is high as well.

00:39:35 Or excuse me, unemployment rate is low

00:39:36 and the underlying inflation rate is high.

00:39:38 There are several ways that the federal government

00:39:40 subsidizes the demand for broadband.

00:39:42 One such program is the Affordable Connectivity Program,

00:39:45 or ACP, which provides a monthly subsidy of $30

00:39:48 to low-income households,

00:39:49 as well as $100 one-time subsidy to buy a tablet,

00:39:53 laptop, or desktop computer.

00:39:55 Economic theory, as Senator Cruz mentioned earlier,

00:39:58 would predict that a demand subsidy

00:40:00 can act as a price floor,

00:40:01 especially in a market where the demand and supply

00:40:03 of a product remain relatively fixed.

00:40:06 In this environment, the producer,

00:40:07 in this case the ISPs, will caption a portion,

00:40:10 if not all, of the subsidy.

00:40:12 In a recent paper, I found that there is

00:40:14 a positive relationship between the percentage

00:40:16 of households receiving ACP subsidies

00:40:18 and the increase in the average total

00:40:20 monthly price for broadband.

00:40:22 Importantly, I do not find any statistically

00:40:25 meaningful association between ACP subsidies and prices

00:40:28 when the level of households receiving subsidies

00:40:30 is under 7%, but today about 15% of households

00:40:34 across the country receive an ACP subsidy.

00:40:36 That corresponds with an average increase of about 7%

00:40:39 in the total cost of a monthly broadband subscription.

00:40:43 These estimates do not change,

00:40:44 even when factoring in the market concentration of ISPs.

00:40:48 Based on the estimates in this paper,

00:40:50 the average cost of broadband is about $5.48 per month

00:40:53 higher because of ACP, implying that ISPs

00:40:56 are capturing about 18% of the total subsidy.

00:40:59 If 40% of households were enrolled in ACP,

00:41:02 as would be the case under the Biden administration's

00:41:04 enrollment proposal, the average change in prices

00:41:06 for plans would be about $9.39.

00:41:11 We've seen how ISPs can offer choices to consumers

00:41:14 and pass along savings through lower prices

00:41:16 in a competitive market when they are not heavily regulated.

00:41:20 The same could be true under a more

00:41:21 competitive market post-ACP.

00:41:24 Subsidizing demand through ACP also makes consumers

00:41:26 less sensitive to prices and quality.

00:41:29 This advantages large existing ISPs who are more likely

00:41:32 to have had existing market share

00:41:33 when the program was created.

00:41:35 If AC funding were to become exhausted,

00:41:38 companies would be encouraged to compete for consumers

00:41:40 shopping for better plans.

00:41:42 In fact, according to Communications Daily,

00:41:45 most ISPs have already told their investors

00:41:47 that when ACP ends, they don't plan to lose any money

00:41:50 because they will be competing on price and quality

00:41:52 to attract consumers who are coming off

00:41:54 of subsidized coverage.

00:41:55 Just in the last week alone, we saw a major ISP

00:41:59 offer a $9.95 plan that wasn't being offered again

00:42:04 before the exhaustion of ACP funding was on the horizon.

00:42:10 Ultimately, this will benefit everyone

00:42:12 by creating a more sustainable, affordable marketplace

00:42:14 for high-speed internet.

00:42:15 Thank you very much, and I look forward to your questions.

00:42:19 - Thank you, Dr. Winfrey.

00:42:21 I'm now gonna recognize myself for five minutes of questions.

00:42:24 And Ms. Tavares, I'm gonna begin with you.

00:42:27 Again, thank you for traveling from New Mexico

00:42:29 to be with us today and for your work over many years

00:42:32 to connect every New Mexican to broadband.

00:42:36 Now, Ms. Tavares, yes or no, from what you have seen

00:42:39 and who you have worked with on the ground,

00:42:42 would students be negatively impacted by a lapse

00:42:46 in the affordable connectivity program?

00:42:48 - Absolutely, yes, and I'll add in all capital letters,

00:42:53 being a teacher at heart.

00:42:55 - Would veterans be negatively impacted?

00:42:57 - Yes.

00:42:58 - Would seniors be negatively impacted?

00:43:01 - Yes.

00:43:02 - Would those who live in our tribal communities

00:43:04 be negatively impacted?

00:43:06 - Yes.

00:43:07 - Would those who live in rural areas

00:43:09 be negatively impacted?

00:43:11 - Yes.

00:43:12 - I appreciate those responses.

00:43:14 Now, Ms. DeWitt, can you please briefly provide

00:43:16 a perspective from your research

00:43:18 on which populations will be the most affected?

00:43:23 - At this point, we know that nearly 1/5 of ACP households

00:43:36 include seniors age 65 and older.

00:43:40 And based on the research that we can do,

00:43:45 we know that any changes to the program

00:43:46 will have an adverse effect on Americans over 50,

00:43:50 as well as veterans.

00:43:51 What I would add is that we need better data

00:43:54 and more transparency on enrollment

00:43:57 and about the trends in population

00:43:59 in order to fully understand how changes to the program

00:44:02 would have a negative effect on the vulnerable households

00:44:05 that it's attempting to serve.

00:44:07 - Appreciate that.

00:44:08 Mr. Levin, you noted in your testimony

00:44:10 that the digital divide puts strain

00:44:13 on our healthcare system.

00:44:15 You also noted that the Affordable Connectivity Program

00:44:18 not only helps people access their healthcare online,

00:44:21 but also the increased use of telemedicine

00:44:24 creates enormous cost savings for our health system.

00:44:27 You referenced a study by the University of Pennsylvania

00:44:29 that telemedicine was 23% less expensive

00:44:33 for health systems to deliver

00:44:35 compared to in-person visits.

00:44:37 Many of the most vulnerable populations

00:44:39 who utilize the Affordable Connectivity Program

00:44:42 are also participants in Medicare or Medicaid,

00:44:46 or are veterans who receive their healthcare

00:44:48 through the VA.

00:44:49 So that 23% savings is a significant cost savings

00:44:52 for the government.

00:44:53 Mr. Levin, from your research,

00:44:55 from what you've seen,

00:44:56 is it possible that the economic benefit

00:44:58 of the Affordable Connectivity Program

00:45:00 to the healthcare system

00:45:01 are greater than the cost of the government

00:45:03 of administering to the government

00:45:05 than administering the program?

00:45:08 - Healthcare economists,

00:45:11 but I believe the answer to be yes.

00:45:14 And if it's not true today,

00:45:15 it's gonna be true sometime in the very near future.

00:45:18 What we saw immediately in the wake of the pandemic

00:45:21 was that healthcare started accelerating its movement

00:45:26 to telehealth.

00:45:26 I believe in February of 2020,

00:45:29 1% of Medicare visits were over telehealth.

00:45:34 In April, it was like 70%.

00:45:36 That was inevitable, but it started to accelerate.

00:45:39 And then efficiencies grow in.

00:45:41 So it's almost inevitable that,

00:45:43 if not today, at some time in the near future,

00:45:47 internet access can actually save money for those programs.

00:45:51 - So on that same note,

00:45:52 do you believe that between healthcare,

00:45:55 employment, and education,

00:45:57 investing in the Affordable Connectivity Program

00:45:59 may actually result in a cost savings,

00:46:02 a net cost savings to the government?

00:46:05 - Yes.

00:46:06 Now, for example, in the job training and job placement,

00:46:08 we find that people who have internet access

00:46:11 get jobs faster, as you would expect.

00:46:13 And then they spend less time on unemployment,

00:46:15 such savings to the government.

00:46:17 - I appreciate that.

00:46:18 Now, Mr. Barr, as you noted in your testimony

00:46:21 that without the reliable customer base

00:46:24 that the Affordable Connectivity Program also provides,

00:46:26 some of New Mexico's small, local

00:46:28 internet service providers, or ISPs,

00:46:30 are at risk of going bankrupt.

00:46:33 When a small, local provider in a rural area

00:46:35 in New Mexico goes bankrupt,

00:46:37 what happens to their customer base?

00:46:39 And can they just find a new provider?

00:46:41 - Actually, it depends.

00:46:43 But generally, the customer's new service.

00:46:46 And in rural New Mexico,

00:46:48 finding an alternate provider is very difficult.

00:46:52 Actually, these networks didn't exist.

00:46:55 If they were easy, we would have built them already.

00:46:57 So when a small, rural community builds a network,

00:47:02 there's often no competition, or little to no competition.

00:47:05 So for those small providers,

00:47:07 if they go bankrupt or fail,

00:47:10 those customers lose service,

00:47:12 and oftentimes, the small government offices,

00:47:15 the local, regional government offices,

00:47:18 and community anchor institutions

00:47:20 that also use that network fail.

00:47:22 And I would add, as well, in New Mexico,

00:47:25 we have 22 tribes that are building their own networks.

00:47:28 Not only do they build them, they are running them.

00:47:32 And they have trained local community members.

00:47:34 So the local workforce also loses out.

00:47:38 Because those community members

00:47:40 who've been trained as fiber technicians,

00:47:43 those jobs go away, and those community members

00:47:46 either have to find an alternate job.

00:47:47 In rural New Mexico, it's not always easy.

00:47:50 They have to travel further, or move to the city.

00:47:54 Just a shout out, our state has been tenaciously

00:47:57 working on that, and we're proud to report

00:47:59 over 200 fiber optic technicians,

00:48:01 with 80% of them being native or Hispanic,

00:48:05 have been trained in the last two years

00:48:06 to run their own networks.

00:48:08 70% of those had some college, but no college degree.

00:48:12 It's very exciting.

00:48:13 - I appreciate that.

00:48:15 Next, we will hear from Senator Vance.

00:48:17 Senator Vance, you're recognized

00:48:18 for five minutes for your questions.

00:48:19 - Great, thank you, Mr. Acting Chair.

00:48:22 I appreciate you, and appreciate all of you for being here.

00:48:25 I wanted to sort of focus my questions on,

00:48:27 you know, the sort of economic impacts

00:48:31 from the consumer's perspective,

00:48:32 but also from the government's,

00:48:34 and also the sort of the businesses

00:48:36 that are investing in broadband infrastructure.

00:48:38 And Mr. Levin, I'd like to direct my questions to you.

00:48:42 So, you know, in your written testimony,

00:48:45 you described the positive impact on employment rates

00:48:47 from discount internet plans.

00:48:49 And you sort of explained how greater

00:48:51 labor force participation and so forth

00:48:52 comes from, you know, having access

00:48:55 to high quality broadband.

00:48:56 I know that's an issue, especially in our rural communities,

00:48:58 but of course, it's an issue

00:49:00 in a lot of different communities as well.

00:49:02 I'd like to sort of understand,

00:49:04 how do you think about the cost savings?

00:49:05 One of the biggest challenges that we have

00:49:08 when it comes to refunding the ACP program

00:49:10 and reauthorizing it, which I support,

00:49:12 is, you know, of course, the pushback

00:49:13 that we are in sort of tight budgetary times.

00:49:15 We have to think about how to save money in this town,

00:49:17 which is something we do far too little of.

00:49:19 Could you help me think about the economic upsides

00:49:22 of the ACP program as you understand it?

00:49:24 What do we gain from investing in this program?

00:49:27 - There are multiple different ways of thinking about it.

00:49:35 I cited in my oral testimony,

00:49:37 a study by a Google economist who talked about

00:49:39 consumer surpluses in 2013 being $500 per user.

00:49:44 That number undoubtedly has gone up.

00:49:46 And if you look at the study,

00:49:47 there's just all kinds of different ways

00:49:49 in which savings of time,

00:49:51 I think all of us have experienced the internet

00:49:52 is able to do certain things,

00:49:54 to speed up, able to shop,

00:49:58 able to determine the most,

00:50:01 the cheapest option for a product that we want.

00:50:05 There are those kinds of savings

00:50:07 that accrue directly to an individual.

00:50:10 But what we also see is,

00:50:13 particularly in terms of the government,

00:50:15 which is in a way sharing in those costs,

00:50:19 in the case of telehealth,

00:50:21 there's very direct savings

00:50:23 because if you save one emergency room visit

00:50:25 by having the person come on broadband

00:50:27 and talk to someone,

00:50:29 and if they turn out not to go to the emergency room

00:50:31 'cause they don't really need to,

00:50:32 I believe that's like a $3,000 savings in terms of time.

00:50:36 I mentioned earlier, in terms of job training and placement,

00:50:39 there's direct benefit to the government,

00:50:42 not just to the person, but to the government.

00:50:45 I think if we look at education,

00:50:47 and my God, what AI is gonna do to education,

00:50:50 I'm very excited about it, I think it's gonna be great,

00:50:53 but if the very people we most want

00:50:55 to be able to use those tools to learn how to read,

00:50:58 and reading scores in fourth grade

00:50:59 are a great predictor of economic success later on in life,

00:51:03 that's another version of those kind of savings.

00:51:05 - So Mr. Levin, if you were done any sort of analysis

00:51:08 of the net benefit,

00:51:10 so if you take, for example, a dollar spent on the ACP,

00:51:13 what is the benefit in terms of government savings

00:51:17 from things like Medicare diverting people into telehealth,

00:51:20 which saves a lot of money, but also consumer upside?

00:51:25 Have you ever sort of tried to understand the net effect

00:51:27 of the given amount that we spend on the ACP?

00:51:30 - Yeah, others are much better than that,

00:51:32 better than me at that.

00:51:33 My friend and probably the leading expert

00:51:36 on that kind of data is a guy named John Horrigan,

00:51:38 who estimated that for every dollar spent,

00:51:40 there's $2 of gain to the individual.

00:51:43 There was a study that said, for every dollar spent on ACP,

00:51:46 we get a $3.89 increase in GDP.

00:51:51 I have not done a comprehensive,

00:51:54 nor do I believe there is a comprehensive study

00:51:57 on healthcare, I sure wish there was.

00:52:00 I think it's something which the government should do,

00:52:03 but it's really about a kind of a larger trend

00:52:05 in which we take advantage of this incredible opportunity

00:52:09 to rethink how we deliver services,

00:52:12 and there's almost no doubt that,

00:52:14 particularly when we come to healthcare,

00:52:15 you'd see a benefit.

00:52:17 - Great, yeah, I'd of course be very interested in that too.

00:52:20 So one just final question is,

00:52:23 when I talk to, obviously we talked about

00:52:25 the consumer side of this and the government side of this,

00:52:28 when I've talked to a number of businesses

00:52:31 who invest in rural broadband,

00:52:33 and obviously it's very expensive to lay a mile of fiber

00:52:37 in Southeastern Ohio, compared to Central Ohio,

00:52:40 where it's a lot more densely populated,

00:52:42 the terrain's a little bit less tough and so forth,

00:52:45 one of the things that sort of justifies

00:52:47 the very large capital expenditure of that infrastructure

00:52:51 is knowing that there are gonna be customers

00:52:53 on the other end, and that's something

00:52:54 that the ACP program ensures.

00:52:56 Could you speak to sort of that economic benefit

00:52:58 a little bit?

00:52:58 - Yeah, BCG did a study which suggests

00:53:01 that the B dollars go 25% further if you have ACP,

00:53:06 for precisely the reason you just said,

00:53:08 that if you have a guaranteed population

00:53:11 that you know is going to pay,

00:53:13 and they're gonna pay on a regular basis,

00:53:15 and one of the mistakes people make is they say

00:53:17 only 22% didn't have broadband.

00:53:21 Actually, there were a lot of people

00:53:22 who were on broadband and off broadband,

00:53:24 that's the largest group.

00:53:26 But if you know you're gonna have that population,

00:53:28 you need less of a government subsidy

00:53:31 to build out that network.

00:53:32 - Yeah, and I'm mindful of my time here, so I'll yield,

00:53:35 but just one observation, anecdotally,

00:53:38 which is not always data, but I do think it's useful,

00:53:40 is I talk to a number of folks who have invested a lot

00:53:43 in rural broadband infrastructure in the state of Ohio

00:53:45 who have told me straightforwardly

00:53:47 they would not have made that investment

00:53:48 if not for the existence of the ACP program.

00:53:50 So I think something important for us to keep in mind

00:53:52 as we think about how to build out

00:53:54 the 21st century digital infrastructure for our country.

00:53:56 So thanks, Mr. Chair, I appreciate it.

00:53:58 - Thank you very much.

00:54:00 Next, we'll hear from Senator Coat,

00:54:01 which I'll recognize for five minutes.

00:54:03 - Thank you very much, Chair, and thank you for the work.

00:54:08 Happy birthday to Senator Welch.

00:54:10 Nice day for a birthday.

00:54:13 I want to actually thank him

00:54:18 and to Senator Vance for their work

00:54:22 on making sure that we continue getting funding

00:54:26 for the Affordable Connectivity Program Extension Act.

00:54:30 And we all know this is an ongoing problem right now

00:54:35 and that Chair Cantwell has been working

00:54:39 to include this funding for ACP.

00:54:41 So I think it's really important to make the case

00:54:44 that I know you have all been doing

00:54:45 throughout this hearing about what this means.

00:54:48 And I want to focus especially on some of the issues

00:54:52 in rural America in my state right now.

00:54:55 So we know that rural communities

00:54:58 are particularly in need of support

00:55:01 to make broadband available at affordable prices.

00:55:04 I've heard from first grade teachers.

00:55:07 We had during the pandemic,

00:55:08 some of the numbers were 20, 30, 40%

00:55:10 in some of our counties that,

00:55:13 while some of the kids were able to access,

00:55:15 including community college classes via the internet,

00:55:19 other ones who just were given paper and pencil

00:55:22 and their workbooks every single day,

00:55:24 it was a complete disconnect.

00:55:27 Mr. Levin, do you agree that programs like ACP

00:55:30 can help incentivize providers to serve high cost areas?

00:55:35 - 5% differential.

00:55:38 - And Ms. DeWitt, you note that the challenge

00:55:42 of building out broadband networks

00:55:44 is distinct from making sure consumers

00:55:46 can afford to access those networks.

00:55:49 Can you discuss how the expiration of ACP

00:55:51 could impact the investments that we're making

00:55:55 in broadband infrastructure?

00:55:56 - Absolutely.

00:55:58 And what we know to be true is that right now,

00:56:01 households that are unserved are currently

00:56:04 the most expensive and difficult to serve.

00:56:07 For example, the cost per passing in Minnesota

00:56:11 using capital project dollars is $7,300 per location.

00:56:16 Without ACP, our bead connections

00:56:20 will be even more expensive.

00:56:22 So we will see the increase of those costs per passing

00:56:24 move up without that ACP support.

00:56:28 Rural providers, particularly those in Minnesota

00:56:31 who have been the backbone of ensuring robust

00:56:33 and affordable connectivity throughout the state,

00:56:36 simply may not be able to shoulder the cost

00:56:38 both of the capital deployment

00:56:40 as well as the operations without that subsidy.

00:56:42 - Exactly.

00:56:43 Thank you.

00:56:44 I mentioned education.

00:56:46 There was one mom in Sibley County, Minnesota

00:56:49 who told us that she's worried her kids

00:56:51 aren't gonna be able to complete their homework

00:56:54 if she can't get the access.

00:56:56 And Mr. Levin, you note that students without home internet

00:57:00 have lower grades and complete homework less often.

00:57:04 Talk about why ACP is important to get at that.

00:57:06 - That came to that conclusion,

00:57:10 but it makes total intuitive sense

00:57:12 that my sister actually was a school teacher.

00:57:16 And many years ago, she kind of blamed me for the fact

00:57:19 that half of her students had internet

00:57:22 and half of her students didn't.

00:57:23 And it was a really big problem for her.

00:57:26 And that's a problem we're gonna see if ACP goes away.

00:57:28 It just that, as all of us do

00:57:33 when we are writing various things

00:57:36 or trying to solve various problems,

00:57:37 we now depend on the internet

00:57:39 to give us the information we need.

00:57:42 It also helps in writing in a variety of ways.

00:57:44 So the students are no different

00:57:47 than the rest of us in that regard.

00:57:49 - Thank you.

00:57:50 Ms. Navarez, can you discuss how you've seen

00:57:53 affordable internet open up educational opportunities

00:57:57 in your work leading the community learning network?

00:58:00 - I am actually a certificated teacher.

00:58:04 So learning is important.

00:58:06 In our state, when COVID hit, many students were struggling.

00:58:10 We actually had students, like you mentioned,

00:58:12 on paper and pen or trying to do homework with a cell phone.

00:58:17 In our case, many of--

00:58:20 - It sounds like a lot of the senators, but continue on.

00:58:22 - Yes.

00:58:24 I think the best thing is to share the example.

00:58:27 Would you want your own children,

00:58:30 whether they're in middle school, high school, college,

00:58:32 to have to do their term papers

00:58:34 with old-fashioned encyclopedias

00:58:36 or be able to compete by accessing information

00:58:40 and participating online?

00:58:42 Every one of us use these tools daily.

00:58:46 We're used to it, and we don't realize how difficult it is.

00:58:50 In our state, without home access,

00:58:52 and for many of our communities,

00:58:54 without the income to afford it

00:58:56 and to have reliable and affordable internet,

00:58:59 they can't do a class online.

00:59:02 Zoom calls take broadband strength.

00:59:06 And they're driving to the community anchor institutions

00:59:09 to sit in a hot car or a cold car if it's snowing

00:59:13 to try to compete with their fellow classmates

00:59:16 and to complete assignments.

00:59:18 - Okay, thank you.

00:59:19 And thank you, Mr. Chair, for all your work in this area

00:59:21 as well and leadership.

00:59:22 Thank you, Senator Klobuchar.

00:59:23 Next, we're gonna hear from the ranking member

00:59:25 of the full committee, Senator Cruz.

00:59:28 - Thank you, Mr. Chairman.

00:59:29 Dr. Winfrey, you note in your testimony

00:59:32 that one proven way to promote broadband affordability

00:59:35 is through competition.

00:59:37 According to a recent study by EconOne,

00:59:40 competition from 5G fixed wireless service

00:59:43 and home broadband markets

00:59:45 was shown to produce billions per year in consumer savings.

00:59:49 These are precisely the competitive benefits

00:59:51 that the Spectrum Pipeline Act,

00:59:54 which I introduced in partnership

00:59:56 with Senators Thune and Blackburn, would provide.

01:00:00 Unfortunately, instead of expanding access

01:00:02 to mid-band spectrum and promoting competition

01:00:06 from wireless services, the Biden administration

01:00:09 has engaged in anti-competitive technology bias

01:00:12 while stalling out on spectrum.

01:00:15 Dr. Winfrey, in your judgment,

01:00:17 how would my spectrum pipeline legislation

01:00:20 compare to the ACP in promoting

01:00:23 long-term broadband affordability?

01:00:26 - Spectrum auctions would increase competition

01:00:28 and bring more folks into the market.

01:00:30 We would have more ISPs doing more cool things with them,

01:00:33 which would ultimately reduce prices.

01:00:35 - And lower prices, in turn, benefits consumers.

01:00:40 - That's right, benefits everybody.

01:00:42 - And higher prices, which the ACP has produced,

01:00:45 that's hurting consumers, is that right?

01:00:47 - That's right, I mean, one of the issues with ACP

01:00:49 is that it's a one-size-fits-all policy.

01:00:52 It's a $30 monthly subsidy,

01:00:54 regardless of where that person sits.

01:00:57 And one of the things that we've seen

01:00:59 is that ACP has predominantly covered folks

01:01:02 living in urban areas relative to rural areas.

01:01:06 So ACP is not a solution for rural areas,

01:01:10 assuming that rural broadband connectivity is an issue,

01:01:13 which I think that it is, and I think that there's a lot

01:01:15 that we can ultimately do there,

01:01:17 which begs the question, well, why don't we use this

01:01:20 as an opportunity to reform ACP?

01:01:22 - Well, and millions of people across Texas

01:01:26 and across the country are hurting from inflation,

01:01:28 inflation that has been galloping

01:01:30 in the last three and a half years,

01:01:32 particularly when Democrats had unified control of Congress

01:01:35 and the White House, where they spent trillions of dollars

01:01:38 we didn't have, they printed money we didn't have,

01:01:40 they borrowed money from China we didn't have.

01:01:43 They're producing inflation that is hurting working families

01:01:46 across the country, and we now have Democrats coming back

01:01:49 saying we wanna spend billions more,

01:01:52 even though it will fuel inflation

01:01:53 and it will drive up the cost

01:01:55 for consumers across the board, is that right?

01:01:57 - That's right, so there are two ways that ACP affects prices.

01:02:01 The first way that it affects prices

01:02:02 is by setting, essentially, a price floor for plans.

01:02:06 What my research shows is that that predominantly hits,

01:02:09 again, urban areas.

01:02:11 So what we saw before ACP is a bunch of plans

01:02:14 that were, say, 20 up, 20 down, $10 a month.

01:02:18 Those went away during ACP, right?

01:02:21 So the speed levels went up moderately,

01:02:24 but the price level went from $10 to $30,

01:02:28 because that's where the AC benchmark is.

01:02:30 So all those cheap plans went away.

01:02:32 And then the second way that ACP affects inflation

01:02:35 is through government spending.

01:02:38 I mean, right now we've seen,

01:02:40 we live in an economic environment

01:02:42 where the Fed is having a really difficult time

01:02:44 getting inflation under control.

01:02:47 Interest rates on short-term debt are 5.5%,

01:02:49 and so every dollar that is spent by the federal government

01:02:53 is ultimately inflationary right now.

01:02:55 - So are consumers better off

01:02:58 at being able to get broadband at $10 or $30?

01:03:02 - $10.

01:03:04 - It's pretty remarkable.

01:03:05 All right, let's shift to another topic.

01:03:07 Dr. Winfrey, in your testimony,

01:03:08 you raised that there are other low-income broadband subsidies

01:03:12 in addition to ACP.

01:03:14 In fact, as we've heard,

01:03:16 there are multiple taxpayer subsidies

01:03:20 for internet connectivity.

01:03:21 GAO recently identified over 130 of them.

01:03:26 The longest standing of these

01:03:28 are the universal service funds programs at the FCC.

01:03:34 I don't think we would be having this conversation

01:03:36 about broadband affordability

01:03:37 if the FCC were properly managing

01:03:40 the universal service fund programs.

01:03:42 Dr. Winfrey, aren't some of these FCC programs

01:03:46 demand-side subsidies,

01:03:49 and what do these programs spend on a yearly basis?

01:03:52 - Sure, they're both demand-side subsidies,

01:03:54 and then they're also supply-side subsidies.

01:03:56 So there are four main programs.

01:03:57 There's Lifeline, the high-cost program,

01:04:00 schools and libraries, or E-rate,

01:04:03 and then rural healthcare.

01:04:04 And together, those four programs

01:04:06 spend about $9 billion a year.

01:04:07 - And yet, according to at least some members

01:04:11 of this committee, the FCC needs yet another program.

01:04:15 Why not fix the current programs

01:04:17 and take the lessons the ACP has learned

01:04:20 and apply them to making sure the funding

01:04:23 we actually have works?

01:04:25 This is what I proposed in my blueprint

01:04:28 for universal service fund reform.

01:04:31 In your view, Dr. Winfrey,

01:04:34 what changes should Congress consider making

01:04:36 to ACP and the universal service fund

01:04:39 before adding additional funding

01:04:41 to any of these programs?

01:04:42 - Sure, I think there are a number of reforms

01:04:44 that can be added.

01:04:45 I mean, we can learn from the experience

01:04:46 of the Affordable Care Act, Obamacare.

01:04:49 Premium tax credits went to low-income individuals,

01:04:53 and we learned that folks

01:04:55 who were receiving those tax credits

01:04:57 shouldn't have actually been receiving those tax credits.

01:04:59 And so one of the things that Congress can do

01:05:02 is it can learn from that experience

01:05:05 to actually recapture ACP funds

01:05:08 that should be used for low-income populations.

01:05:10 It's probably going to folks

01:05:12 who are making much more than two times

01:05:13 the federal poverty line.

01:05:15 Another option that the FCC IG has explored

01:05:18 is requiring Social Security numbers

01:05:20 for the receipt of ACP benefits

01:05:22 to make sure that, again, folks who are entitled

01:05:26 to the program are actually receiving the benefit

01:05:28 and that the benefits are not going to folks

01:05:30 who shouldn't be receiving those benefits.

01:05:34 But as I mentioned before,

01:05:36 one of ACP's main problems

01:05:38 is that it's this universal program.

01:05:40 It's a one-size-fits-all issue.

01:05:42 And if ACP funding should expire

01:05:46 and Congress should begin thinking about

01:05:51 how to reform some of these underlying programs,

01:05:55 it needs to take those regional differences into account.

01:05:59 The issues that we see in New Mexico

01:06:02 versus Minnesota versus Texas are all different,

01:06:05 and these one-size approaches just don't work.

01:06:07 We've learned that time and time again.

01:06:09 - Thank you.

01:06:10 - Thanks, Senator Cruz.

01:06:12 Next, we'll hear from Senator Peters.

01:06:13 You're recognized for questions.

01:06:15 - Well, first off, I just want to thank our witnesses.

01:06:17 Thank you for being here today.

01:06:19 And I also want to thank Chair Lujan.

01:06:21 Thank you for holding this hearing.

01:06:23 And I think this hearing is extremely timely

01:06:26 because almost one million Michigan households

01:06:30 are on the precipice of losing

01:06:33 the Affordable Connectivity Program,

01:06:35 which was passed by Congress two years ago.

01:06:37 And as we all know,

01:06:38 it helps eligible families afford the internet.

01:06:43 And in today's world, the internet is not a luxury.

01:06:46 It's a necessity.

01:06:48 And it's one that should be affordable to all Americans.

01:06:51 And I believe that Congress must do its job

01:06:53 and fund this critical program as soon as possible,

01:06:56 or 16% of American households

01:06:59 are going to face internet shutoff or rate hikes.

01:07:02 And as a supporter

01:07:03 of the Affordable Connectivity Program Extension Act,

01:07:06 I'm going to keep fighting for funding,

01:07:08 and I challenge all my colleagues,

01:07:10 including those on the other side of the aisle,

01:07:11 to do the same.

01:07:13 Mr. Witt, my first question is for you.

01:07:17 In your testimony,

01:07:19 you mentioned how the Affordable Connectivity Program

01:07:21 is closely linked to the state's ongoing plans

01:07:24 for bead deployment.

01:07:27 My state of Michigan received nearly $1.6 billion

01:07:30 in bead funding, the fourth highest allocation in the nation

01:07:34 to close the digital divide

01:07:36 and to bring high-speed internet to every corner of Michigan,

01:07:39 which is both urban, suburban,

01:07:41 and vast tracts of rural areas as well.

01:07:46 Mr. Witt, can you speak to how it would impact

01:07:48 the Beads Program ability

01:07:50 to reach every underserved and unserved location

01:07:53 if ACP is lapsed?

01:07:55 And additionally, do you think that ACP's lapse

01:07:58 could impact bead participants' decisions

01:08:01 as to where to apply for funding

01:08:03 and how far they can reach with their proposed projects?

01:08:09 -I'll answer your second question first, which is yes.

01:08:12 I do believe that ACP's lapse

01:08:14 would affect an internet service provider's decision

01:08:17 to participate in bead

01:08:19 because they have said that.

01:08:21 And that's why it's important to ensure

01:08:23 that we provide internet service providers with that certainty.

01:08:28 With respect to the Bead Program writ large, in short,

01:08:33 we need every single dollar to connect unserved

01:08:37 and underserved Americans across this country.

01:08:40 As you outlined, Michigan is one of the states

01:08:42 that has a complicated problem ahead of them.

01:08:46 And thankfully, it has a very well-run broadband office

01:08:51 and a strong strategy.

01:08:53 But I think that the important consideration

01:08:56 is that bead and ACP were designed to work together.

01:08:59 They are designed to work in tandem

01:09:01 to defray the costs of building networks,

01:09:04 whether we are looking at urban, rural, or suburban communities.

01:09:09 And because Congress requires ACP to participate in --

01:09:15 requires ISPs to participate in ACP to receive bead funding,

01:09:19 this means that we are providing them

01:09:21 with a surety of a guaranteed customer base,

01:09:24 decreased churn, and long-term retention.

01:09:28 -Very good. Mr.

01:09:29 Witt, as you well know, the Universal Service Fund

01:09:32 has long been a tool for connecting Americans

01:09:35 to voice service and broadband access.

01:09:38 However, the USF has not been modernized

01:09:41 to account for today's needs

01:09:43 related to universal broadband service.

01:09:45 And I'm a proud member of the bipartisan USF Working Group,

01:09:49 led by Senators Lujan and Thune.

01:09:52 And we have made progress towards a long-term,

01:09:55 bipartisan solution that will enable the USF

01:09:58 to support broadband accessibility

01:10:00 and affordability for all consumers.

01:10:02 And one of my top priorities as a member of this working group

01:10:06 with Chair Lujan is to find a long-term,

01:10:09 sustainable funding mechanism for ACP

01:10:11 so Americans never have to face another program cliff

01:10:15 like the one that we have right now.

01:10:17 We have enough cliffs that we have to deal with.

01:10:18 We don't need this one as well.

01:10:20 So my question for you is, can you speak to the importance

01:10:23 of finding a way to sustainably fund ACP in the long term,

01:10:27 such as through modernizing the Universal Service Fund?

01:10:31 -Well, Pew does not have research on solutions

01:10:35 for the modernization of the Universal Service Fund

01:10:37 at this time.

01:10:39 We do know that it is needed,

01:10:41 and it is needed for all of the reasons

01:10:42 that you just outlined, which is why we appreciate

01:10:44 the work of you and others on that bipartisan

01:10:47 and bicameral working group to identify one,

01:10:50 including incorporating the ACP into that program.

01:10:54 However, universal service reform will take time.

01:10:58 It will take time to come to agreement,

01:10:59 and moreover, it will take time to implement.

01:11:02 We don't have the luxury of time at this moment.

01:11:04 ACP is running out of money,

01:11:06 and potential BEED participants, states, ISPs,

01:11:10 communities, we are putting their connectivity solutions

01:11:14 at risk by delaying, which is why we ask

01:11:16 that you provide the bridge to ACP today

01:11:18 and continue work on USF in the future.

01:11:21 -Right. Well, thank you for your answers.

01:11:22 Chair Lujan, thank you so much.

01:11:24 -Thank you very much, Senator Peters,

01:11:26 and I want to thank Senator Caput as well.

01:11:28 Mr. Wald, you'll be recognized next for five minutes.

01:11:31 Thanks for getting here early.

01:11:32 -Thank you very much.

01:11:34 You know, we have got an urgent, immediate situation

01:11:39 that has to be addressed,

01:11:40 and that's the expiration of the ACP.

01:11:43 And there's two points that I want to make.

01:11:47 Number one, every witness here has acknowledged

01:11:51 that the debate about whether everybody needs

01:11:53 the Internet is over.

01:11:55 It is over.

01:11:57 And a lot of us, Ben Ray, you and I,

01:12:00 were arguing pre-COVID for rural America to get Internet

01:12:05 just like rural America got electricity in the '30s.

01:12:09 That was not an economic decision that was made

01:12:12 because it didn't have business sense

01:12:14 to have our companies extending electricity in rural areas

01:12:20 where there wasn't a big return, but it was a social decision,

01:12:23 and we made that, and a lot of us were pushing for it.

01:12:26 When COVID came, it made the case for us

01:12:28 because you couldn't go to work, your kids couldn't do homework,

01:12:30 you couldn't get a medical appointment.

01:12:32 And this Congress, on a bipartisan basis,

01:12:34 really put enormous money into building it out.

01:12:38 That doesn't do any good for folks

01:12:40 if they can't get connected to it.

01:12:43 And I've listened to the -- so that's number one.

01:12:47 We've got to have it.

01:12:49 We've got to have it, and we all know that.

01:12:51 And that's a red state or blue state.

01:12:52 It just doesn't matter.

01:12:53 The citizens we represent need it.

01:12:56 Second, there's a lot of folks who are on the margin.

01:12:59 And the ACP, if it goes out now, a lot of those folks

01:13:03 are going to have to make very tough decisions.

01:13:05 You know, an example in Vermont,

01:13:07 some woman making $15,000 with two kids, single parent.

01:13:11 She has got a hard job trying to figure out

01:13:14 how to make ends meet and has to make real sacrifices,

01:13:18 sometimes in the food budget.

01:13:20 But she'll do it because she wants her kid

01:13:22 to be able to do the homework.

01:13:24 Or a grandparent who wants to stay in touch

01:13:27 with grandchildren or their kids.

01:13:30 And we've heard very compelling arguments

01:13:34 about some of the reforms that we should make.

01:13:36 Senator Capito has been a big advocate of that.

01:13:39 And I agree that those of us who advocate for a program

01:13:42 have an obligation to kick the tires, check it out,

01:13:46 make reforms so that the intended purpose

01:13:49 is what's being served and it's not being gamed.

01:13:52 So I, for one, who am a strong proponent

01:13:55 of the Affordable Connectivity Program,

01:13:58 pledged to work with my colleagues,

01:14:01 Republican and Democrat, to make it better.

01:14:04 But we're not there yet.

01:14:07 And what we can't do, Mr. Chairman,

01:14:09 as you so assertively state, is let this expire.

01:14:14 Because there's four million veterans who depend on this.

01:14:19 There's a lot of seniors who depend on it.

01:14:22 And the economic arguments that we're having back and forth,

01:14:25 they're real, we've gotta deal with them.

01:14:28 And some of those, Dr. Winfrey, I can accept.

01:14:33 But we can't let this expire.

01:14:35 And that's what's happening.

01:14:37 So my hope, Mr. Chairman, is that all of us

01:14:42 work hard together to try to get at least a short-term fix

01:14:46 while the work you're doing, leading the working group,

01:14:51 comes up with a longer-term solution.

01:14:55 So I just wanna express my gratitude to the witnesses here.

01:15:00 But I also wanna express my enormous apprehension

01:15:03 that this Congress may fail by letting this expire

01:15:08 rather than continue it while we work out

01:15:14 the long-term changes that are needed for sustainable access.

01:15:19 Thank you, I yield back.

01:15:20 - Thank you, Senator Welch.

01:15:22 Senator Capito, you're recognized for your questions.

01:15:24 - Thank you, thank you, Mr. Chair.

01:15:27 Before I ask the questions, I would like to take a moment

01:15:29 to express my disappointment with how the markup went,

01:15:33 or should I say more accurately, did not go yesterday.

01:15:36 I have worked with my colleague, Senator Klobuchar,

01:15:39 on my Rural Broadband Protection Act

01:15:42 beginning last Congress.

01:15:43 It's a common-sense bill that will help USF

01:15:47 high-cost projects across our country.

01:15:49 It's been sitting in this committee

01:15:51 since the beginning of this Congress,

01:15:53 and after working to improve the bill,

01:15:55 my substitute amendment was cleared to be marked up

01:15:57 both by the majority and the minority back in November.

01:16:02 I urge the chair, through you,

01:16:04 to schedule a legislative markup this work period

01:16:08 so that my top broadband policy priority can be considered.

01:16:13 I would appreciate you, we'll talk to the chair

01:16:17 and ranking member about that.

01:16:19 So, moving to my questions, Ms. DeWitt,

01:16:22 I know that many states,

01:16:23 and I think you've gone through this,

01:16:25 and I caught the tail end of you mentioning it

01:16:27 to Senator Peters.

01:16:30 West Virginia was the second state

01:16:32 that actually got their Part 2 BEAD plan okayed,

01:16:37 and we're very excited about that,

01:16:42 but can you describe the impact on BEAD programs,

01:16:45 because we have part of the Affordable Connectivity Plan

01:16:48 as part of our deployment plan,

01:16:51 how this will affect if the ACP does not get funded?

01:16:56 - Yes, and thank you for the question, Senator Capito,

01:17:00 and for your ongoing work to continue supporting the program,

01:17:04 including for robust discussions about potential reforms.

01:17:07 Right now, let me just draw attention

01:17:10 to the current costs per passing

01:17:12 that were shared from West Virginia's capital projects funds,

01:17:15 and that's $4,200 per location.

01:17:19 What research from the Boston Consulting Group

01:17:21 has found that without the BEAD subsidy,

01:17:24 we will see a $500 per location differential on--

01:17:29 - Without the ACP.

01:17:31 - Sorry, yes, without ACP.

01:17:33 Sorry, excuse me.

01:17:34 So the Boston Consulting Group study found that without ACP,

01:17:39 the cost per passing may increase by $500 per location.

01:17:45 So what we can assume from this

01:17:47 is that the cost for deployment in West Virginia

01:17:50 will increase without ACP available.

01:17:55 - Does the, is that, would you say 4,200?

01:17:59 - Yes, ma'am, but that's with the capital projects fund,

01:18:02 what the state has spent,

01:18:04 and that includes significant matching funds

01:18:07 from internet service providers as well, so.

01:18:09 - Right, now I've been told,

01:18:11 and I can see living in such a beautiful state

01:18:14 with lovely mountains, but hard rocks in between,

01:18:17 that the cost to build in our state,

01:18:19 obviously for fiber, is much greater.

01:18:21 How does that 4,200 stack up?

01:18:23 I'm just curious to know, is that high, is high cost?

01:18:26 - I would need to get back to you

01:18:29 to quote the specific numbers,

01:18:32 but yes, that is, the numbers are high,

01:18:35 and of course the cost per location passing

01:18:38 is going to depend on a number of factors,

01:18:40 including the topography,

01:18:42 as we're all familiar with West Virginia,

01:18:44 but also density of population.

01:18:47 - Okay, Dr. Winfrey, one, I mean,

01:18:49 I've been alluded to as the one who wants to be the reformer

01:18:52 and I couldn't be more passionate about this.

01:18:54 I mean, just, I think it was this week, earlier this week,

01:18:58 the president of a local internet service provider

01:19:01 said that he was informed that he's eligible

01:19:04 for the $30 a month, because of the way it's,

01:19:08 the school lunch program in our state

01:19:10 makes everybody eligible.

01:19:12 I mean, it cannot possibly be true

01:19:15 the 23 million people really need this.

01:19:17 We've got to narrow it down to the need.

01:19:20 I'm supportive of the program.

01:19:22 Could you respond to that?

01:19:25 - That's exactly right.

01:19:26 I mean, as I mentioned earlier,

01:19:27 ACP is fundamentally not a program for rural areas.

01:19:31 It is a program for urban areas.

01:19:33 Most ACP recipients live in urban areas,

01:19:37 even after you adjust for the fact

01:19:39 that most people live in urban areas,

01:19:42 and the challenges that people have

01:19:43 in both urban versus rural areas are very different,

01:19:46 as you are an expert on representing

01:19:49 the great state of West Virginia.

01:19:51 That said, like other government programs as well,

01:19:57 I mean, I referenced in my responses to Senator Cruz,

01:20:02 we had a similar challenge with the Affordable Care Act.

01:20:05 There are premium tax credits that people get

01:20:07 to help them afford private health insurance,

01:20:11 and we learned very quickly that there were millionaires

01:20:15 who were receiving those premium tax credits

01:20:18 for lots of different reasons.

01:20:19 And so there needs to be a reconciliation process

01:20:22 to make sure that the funds are targeted in the best way,

01:20:27 and that both urban, there's an urban versus rural adjustment.

01:20:32 - Well, yeah, I would be interested

01:20:34 in the urban and rural adjustment.

01:20:36 I just think that I understand the urgency

01:20:39 and the expiration, and instead of $30,

01:20:42 I understand it's $14.

01:20:44 I don't know how long that's gonna last.

01:20:45 Does anybody know what the long, yes.

01:20:48 One month.

01:20:50 So, you know, ostensibly not long, not long at all.

01:20:55 We've known this was coming.

01:20:57 We've been talking about reform for a year.

01:21:00 I don't know why we have to be pressed now

01:21:03 to move forward to a way over expansive program

01:21:06 that is going towards people that,

01:21:10 some people that don't need it,

01:21:11 so because it's not fair to the people that do need it,

01:21:14 because it calls into question

01:21:16 what's gonna happen with the entire program.

01:21:18 So I would ask my colleagues to listen to experts

01:21:22 on the panel here to figure out a way

01:21:25 that we can do both of these things.

01:21:27 And I think we can and meet the challenges.

01:21:30 Obviously, I'm in a state that has economic challenges.

01:21:32 We have some of the lowest broadband deployment

01:21:35 in the entire country.

01:21:36 And I think it's the digital divide,

01:21:40 you can see it all over our state

01:21:42 with economic development, education progress,

01:21:45 healthcare outcomes.

01:21:48 And so I am very passionate about getting to the last house

01:21:51 and to make sure that everybody has equal access,

01:21:55 but that they can afford it at the same time.

01:21:56 So I thank you all for what you're doing.

01:21:58 I appreciate, Mr. Chairman,

01:22:00 the chance to address the panel.

01:22:02 Thank you.

01:22:03 - Thank you, Senator Capito.

01:22:04 Senator Warnock, you're recognized for questions.

01:22:06 - Thank you so very much, Chairman Lujan.

01:22:09 I'm extremely disappointed that politicians in Washington

01:22:14 allowed the Affordable Connectivity Program

01:22:17 to completely run out of funding this week.

01:22:21 This program is critical for helping 720,000 Georgians

01:22:28 afford the internet, particularly rural Georgians

01:22:31 and older Georgians often say that broadband

01:22:35 is to the 21st century,

01:22:37 what electrification was to the 20th century.

01:22:40 And as you watch Washington dally around

01:22:43 something so important, one way of thinking about it

01:22:46 is as if we were wondering whether or not

01:22:48 people need electricity.

01:22:49 Is that fundamental or is it something extra?

01:22:53 So hundreds of thousands of Georgians

01:22:55 are about to start seeing their internet bills

01:22:57 shoot up this month because some of my colleagues

01:23:00 refused to fund this important program.

01:23:03 But the Affordable Connectivity Program

01:23:05 is not just a tool to close the digital divide

01:23:08 as important as that is and increase our global connectivity

01:23:12 it's also a healthcare lifeline.

01:23:15 For hundreds of thousands of Georgians,

01:23:17 particularly rural residents, veterans, service members

01:23:22 and seniors across the country.

01:23:25 This is especially true in a state like Georgia.

01:23:29 According to a recent study, military families

01:23:30 make up nearly half of the households that benefit

01:23:34 from the ACP.

01:23:35 Mr. Levin, does the ACP help veterans

01:23:39 and military families access critical healthcare services?

01:23:44 - There have been a number of studies to demonstrate that.

01:23:47 - Absolutely and in your testimony, Mr. Levin,

01:23:50 you cite two studies,

01:23:52 one from the Department of Veterans Affairs

01:23:55 showing that veterans who use telehealth emergency services

01:23:58 were half as likely to make a costly trip

01:24:02 to an emergency department.

01:24:03 So as is often the case, the right thing to do here

01:24:07 is also the smart thing to do.

01:24:08 We know that veterans or anybody having to go

01:24:12 to get emergency healthcare for routine care,

01:24:14 something that could have been arrested earlier

01:24:17 is a problem not only for that person

01:24:19 but it's not a cost effective way

01:24:22 for us to manage our affairs.

01:24:25 The other study showed that telehealth access

01:24:27 helps save patients and the federal government money

01:24:31 as I point out.

01:24:32 It sounds like the ACP can help both increase access

01:24:36 to healthcare while reducing costs

01:24:39 and saving the government money.

01:24:40 Is that correct?

01:24:41 - That's correct.

01:24:42 - And so in that sense, it's a win-win.

01:24:44 The right thing to do is a smart thing to do.

01:24:47 - Absolutely.

01:24:48 - That's why I've spent years fighting

01:24:50 to expand access to healthcare and to reduce costs

01:24:55 and that's why I continue to fight

01:24:56 to cap the cost of insulin at $35 for everybody

01:25:02 and it's why I will continue to champion the ACP.

01:25:05 All of these things are connected.

01:25:09 When people can't stay connected,

01:25:13 it impacts their healthcare, their overall quality of life.

01:25:17 Now Mr. Levin, your testimony also notes

01:25:19 the similarities between where internet subscription rates

01:25:23 are low and where maternal mortality rates are high.

01:25:30 When internet, where internet subscription rates are low

01:25:34 and where maternal mortality rates are high.

01:25:36 Can you speak more about the connection

01:25:38 between broadband affordability and maternal mortality?

01:25:43 I think that's not something

01:25:45 that people think about every day.

01:25:46 Tell us about that.

01:25:47 - So I think it's important to remember

01:25:49 correlation does not apply causation

01:25:52 but the FCC mapping demonstrated

01:25:55 and if you look at the map of maternal mortality

01:25:58 and you look at the map of where

01:25:59 not as many people are connected,

01:26:00 there does seem to be a correlation

01:26:04 but that's not necessarily again a causality.

01:26:07 But what's also true is you,

01:26:09 and I put this in the testimony,

01:26:11 what people have been able to do

01:26:15 and this is the innovation cycle we really want to encourage

01:26:19 they have been using that broadband connection

01:26:23 to help pregnant women identify things

01:26:26 before they're really a big problem

01:26:28 to engage in certain practices

01:26:30 that make the birthing safer and things like that.

01:26:34 Preventative, this goes to what you were saying earlier,

01:26:37 preventative care is a win-win

01:26:39 but a lot of times people don't have time

01:26:41 to go to the hospital

01:26:42 and therefore a broadband connection saves them that time

01:26:46 and they're more able and there's a greater incentive

01:26:50 to do that preventative care.

01:26:51 - Right and I appreciate the care

01:26:54 with which you approach this as a scientist

01:26:57 that causation and correlation are not necessarily

01:27:01 connected but in a state like Georgia

01:27:04 where again all of these things are connected,

01:27:07 there's connectivity in a different way.

01:27:10 In a state like Georgia where we're seeing hospitals close

01:27:14 some 10 hospitals in a decade

01:27:17 as we've refused to expand Medicaid,

01:27:20 this access it seems for people's overall health care

01:27:23 would be critically important.

01:27:25 - Absolutely.

01:27:26 Thank you so very much and I hope that

01:27:29 we can get this program the funding that it needs to operate.

01:27:32 - Thank you.

01:27:33 - Thank you Senator Warnock.

01:27:34 Next we'll hear from our ranking member Mr. Thune

01:27:36 for a question.

01:27:37 - Thank you Mr. Chairman.

01:27:38 Dr. Winfrey in your testimony you discussed the impact

01:27:41 that deregulation has on broadband prices.

01:27:44 The current FCC seems intent on increasing its control

01:27:47 and regulating every aspect of the internet

01:27:49 most recently with its so-called net neutrality order.

01:27:52 In your experience what is the impact

01:27:54 of highly regulated sectors of our economy

01:27:56 and what are the practical effects

01:27:58 of the FCC's regulations on broadband prices?

01:28:01 - One instance where the Congress stepped in

01:28:07 and nullified a FCC rule and we saw prices

01:28:11 for both wired and wireless drop pretty significantly.

01:28:13 For wireless dropped 10% and for wired dropped 2%.

01:28:17 But taking a step back and asking what regulation

01:28:21 generally does to prices,

01:28:23 I mean where we see highly regulated marketplaces,

01:28:27 education, healthcare, transportation,

01:28:31 we tend to see higher prices.

01:28:34 So there's a direct connection between more regulation

01:28:37 and higher prices.

01:28:38 And there's a direct connection typically

01:28:40 between more government involvement

01:28:42 even on the subsidy side and higher prices.

01:28:45 - So testimony before the committee today references data

01:28:52 that for every dollar invested in ACP GDP

01:28:55 sees an almost fourfold increase.

01:28:57 How do you respond to the findings

01:29:00 presented in that white paper?

01:29:02 - I have looked at the white paper.

01:29:04 The co-authors of the white paper

01:29:07 were a geographer at George Mason University

01:29:10 and a high school senior in Fairfax County.

01:29:12 And as an economist, I mean quite frankly

01:29:15 it's a very impressive paper by a high school senior.

01:29:19 I would love to have them as my student.

01:29:22 The problem with the analysis

01:29:25 is that it relies on what's called input-output analysis

01:29:28 which assumes that there is no change

01:29:32 in a policy response on behavior.

01:29:36 This is something that economists have known

01:29:39 has been a suboptimal way to model things

01:29:43 since the late 1970s.

01:29:45 As a matter of fact, there was an economist

01:29:48 at the University of Chicago, Bob Lucas,

01:29:52 who won the Nobel Prize in 1995 for suggesting

01:29:55 and showing that this kind of analysis

01:29:58 has major, major challenges.

01:30:00 So I think that there are better ways to do this

01:30:04 but I would take the $1 for $4 with a grain of salt.

01:30:08 - And that, you used a static model,

01:30:11 is that essentially what you're saying?

01:30:13 - It does use a static model but the,

01:30:16 again, sort of taking a step back,

01:30:19 one of the main assumptions that it makes

01:30:22 is that ACP doesn't actually exist.

01:30:26 And all we're doing is adding ACP on top of an economy

01:30:29 without modeling any of the behavioral impacts

01:30:34 that ACP might have, including on prices,

01:30:37 which is one of the sort of main components of my research,

01:30:42 looking at the effect that ACP has on prices.

01:30:44 The other thing that it doesn't do that's important,

01:30:46 and I mentioned this earlier,

01:30:48 is that for every dollar that we're spending right now,

01:30:51 so since the beginning of 2020,

01:30:53 76% of all new spending since the first quarter of 2020

01:30:57 has been funded by a debt, by new bonds, treasury bonds.

01:31:02 14% through money creation.

01:31:04 Only 7% has been paid for with revenue.

01:31:08 That's one of the reasons why we're seeing

01:31:10 interest payments on the debt skyrocket

01:31:13 and interest rates skyrocket.

01:31:14 So for every dollar that you borrow to spend on something,

01:31:17 you're paying 5.5% interest.

01:31:20 That rolls over on a three-month basis,

01:31:23 just given how treasury has had to manage

01:31:26 its debt management over the last couple of years.

01:31:30 So that's one of the reasons why we're seeing inflation,

01:31:33 and you need to take something like that into account

01:31:36 if you're projecting the impacts of any program,

01:31:41 ACP or any program on economic growth.

01:31:44 - Right, and it is a dynamic economy,

01:31:46 which is why there are a lot of interactions

01:31:48 and things have to be mapped out as well.

01:31:50 It seems like this is a fairly isolated study.

01:31:54 Similarly, Chair Rosenworcel has been pushing an ACP,

01:31:58 quote, fact sheet that states that, and I quote,

01:32:01 more than three-quarters of respondents

01:32:03 say losing their ACP benefit would disrupt their service

01:32:06 by making them change their plan

01:32:09 or drop internet service entirely, end quote.

01:32:12 Is this actually what the FCC's survey data reveals,

01:32:18 in your view?

01:32:19 - So I think there are two issues here.

01:32:21 The first issue is, what does the survey data show?

01:32:24 And then the second issue is,

01:32:26 is this survey something that we can rely upon?

01:32:28 And this is actually following up on something

01:32:31 that Mr. Witt mentioned a few moments ago

01:32:33 within regards to making sure that we're getting

01:32:35 the right information out of FCC to make policy decisions.

01:32:38 So if you take the FCC's data as gospel,

01:32:44 then it shows that only 15.7% of folks

01:32:49 will lose broadband coverage if ACP goes away.

01:32:54 Now the problem is, is that the way the survey

01:32:57 was conducted is they went out to 110 households,

01:33:00 and only 5,300 and some households responded to the survey.

01:33:05 Now OMB says that when your survey response rate

01:33:09 is under 70%, in this case,

01:33:12 than the 5,300 and some odd households,

01:33:15 you have to have a methodology, a new methodology

01:33:19 for addressing that non-response rate.

01:33:22 And so FCC didn't do that.

01:33:24 And that's one of the challenges that I have

01:33:27 as an economist and somebody who looks

01:33:29 at government survey data on a regular basis.

01:33:32 I don't even know how to read this survey.

01:33:33 Like it might be representative,

01:33:36 it might not be representative.

01:33:37 The reality is is that we just don't know,

01:33:39 and we shouldn't be passing it along

01:33:42 as if it is representative.

01:33:43 Rather, we should ask FCC and potentially fund them

01:33:48 to go collect more and better data on the program.

01:33:51 - Thank you.

01:33:52 Mr. Chairman, my time has expired.

01:33:53 Let me just close by saying there's been some discussion

01:33:55 today or two about the BEAD program.

01:33:57 Our telecom producers, or telecom providers

01:33:59 were in town this week, and this is the co-ops,

01:34:01 the independents, those that serve

01:34:02 the most rural areas of South Dakota.

01:34:04 And there isn't a single one of them

01:34:06 that can use the BEAD program.

01:34:08 And the reason is because of all the conditions

01:34:10 and rules and regulations that the administration

01:34:13 attaches to the program, many of which

01:34:15 are completely unrealistic for the kind of service

01:34:18 that these folks provide in rural areas of the country.

01:34:21 So sometimes getting more government involved

01:34:26 in some of these issues ends up not being a good solution.

01:34:29 It ends up making matters worse.

01:34:30 Thank you.

01:34:31 - Thank you, Mr. Chairman.

01:34:32 Mr. Tester, you're recognized for your questions.

01:34:35 - Thank you, Mr. Chairman.

01:34:36 I wanna thank all the folks who testified for being here.

01:34:40 I'm gonna start with you, Dr. Winfrey.

01:34:43 I believe in capitalism, I'm sure you do.

01:34:46 I believe in competition in the marketplace.

01:34:49 Broadband's kind of a little different situation

01:34:51 in that, number one, if we,

01:34:54 and maybe you can disagree with me if you want.

01:34:57 I think the private sector doesn't necessarily

01:35:02 interested in laying broadband into rural America

01:35:04 in places like I live, we're the nearest neighbors

01:35:07 a mile away, and I live in a place

01:35:11 that isn't the end of the earth, truthfully.

01:35:13 But the question is is that, so we put money

01:35:17 into an infrastructure bill to help these companies

01:35:19 lay broadband, we didn't want broadband

01:35:21 to be laid over existing broadband

01:35:23 because then that's a waste of money.

01:35:25 So that competition, that competition issue goes away.

01:35:30 The question I have is it doesn't do any money

01:35:34 to lay broadband if people can't afford it.

01:35:36 Just doesn't do any good.

01:35:39 How do we make it affordable?

01:35:40 If not with this program, how do we make it affordable

01:35:43 when, especially in rural areas where I still have folks

01:35:47 that don't have any internet service whatsoever,

01:35:50 they don't have fiber, they don't have nothing.

01:35:53 They got a phone, that's it.

01:35:54 And they probably like it that way, by the way.

01:35:56 But how do we make it affordable

01:36:00 if not with this program, how do we make it affordable

01:36:02 when, in fact, there isn't the competition

01:36:03 in the marketplace that there normally would be

01:36:05 to help drive down prices and give the consumer

01:36:08 an honest value for their product?

01:36:12 - I mean, that's a great question.

01:36:13 I mean, as I mentioned earlier,

01:36:15 given the state of the economy that we're in,

01:36:17 I think that there are major problems

01:36:19 with subsidizing demand.

01:36:21 I don't think that those same problems exist

01:36:24 in subsidizing supply.

01:36:25 And so take Bede, right?

01:36:27 So we've talked a little bit about Bede today.

01:36:30 You've got 20 states that have already come out

01:36:32 and said that they wanna use their Bede funds

01:36:35 for non-deployment, right?

01:36:37 Which tells me, given that broadband deployment

01:36:41 was sort of central to the Bede program,

01:36:43 that those initial allocations

01:36:45 might not have been exactly right, right?

01:36:49 So I think we need to think about

01:36:51 like what to do on that side.

01:36:54 I would also encourage folks to go look

01:36:57 at the state and local fiscal recovery funds.

01:36:59 So in ARPA, there were $350 billion

01:37:01 in state and local funds.

01:37:05 Of the $350 billion, there's still $70 billion remaining

01:37:10 that has not been obligated by states and local governments.

01:37:14 The Biden administration has been pushing this

01:37:17 on states and locals.

01:37:18 They've been pushing it on nonprofits

01:37:20 to go try to encourage people to think outside the box.

01:37:23 One of the problems with the SLFRF money

01:37:26 is that in order to spend it,

01:37:28 you have to allocate it to one of seven categories.

01:37:32 If one of those categories is infrastructure

01:37:35 or broadband or housing or anything

01:37:39 where you're actually building something,

01:37:41 you have to fill out more paperwork.

01:37:46 And so what the states and locals are doing

01:37:48 is that they're channeling it all

01:37:49 into what's called revenue replacement

01:37:52 or negative economic impact, right?

01:37:55 Which I think has led to an overspending

01:37:59 on those categories and an underspending

01:38:02 on critical infrastructure.

01:38:04 And so I would think sort of creatively

01:38:07 about how to get some of those capital investments involved.

01:38:12 - Okay, so we do a lot of things here.

01:38:15 Military, for example,

01:38:16 we give an increase for housing allowance, okay?

01:38:21 BAHC, they call it.

01:38:23 And what happens many times when we announce

01:38:26 we're giving an increase for housing allowance,

01:38:27 guess what happens?

01:38:28 The people who are renting the,

01:38:29 yeah, they jack it up before they even get it.

01:38:31 So it's a net zero and sometimes even worse.

01:38:34 Is there any way, and I'll stick with you, Dr. Winfield,

01:38:38 not that the other guys aren't a lot of fun 'cause you are,

01:38:41 but is there any way when we have a subsidy program,

01:38:46 and I'm in agriculture,

01:38:47 so I know what subsidies are all about.

01:38:49 Is there any way when we have a subsidy program

01:38:53 to hold particularly the big companies?

01:38:55 I really, I'm a rural guy and I don't think

01:38:57 the rural co-ops are doing this as much,

01:39:00 but the big companies tend to get

01:39:03 what you can get out of the marketplace,

01:39:05 and if that subsidy goes up, they'll jack their rates.

01:39:07 Is there any way to stop that?

01:39:08 - Well, that's exactly what my research finds, right?

01:39:10 And part of the reason why my research finds this

01:39:13 is that ACP is, as I mentioned earlier,

01:39:15 is predominantly a program that serves urban areas

01:39:20 relative to rural areas,

01:39:21 when rural areas have a completely different challenge.

01:39:23 - Yeah, they do.

01:39:24 - Yeah, and I mean, I'll just, I'll give a,

01:39:27 I'll give sort of my own example.

01:39:29 I have, my sister lives in the Middle Peninsula in Virginia,

01:39:33 which is a really rural farming community

01:39:35 between the peninsula and the northern neck,

01:39:38 and they don't have many options there.

01:39:42 Mobile doesn't work very well

01:39:44 'cause you're close to the bay.

01:39:46 Fixed wireless doesn't work very well,

01:39:48 and they've received a lot of money from the state,

01:39:50 that region, to build fixed wire, and it's now there,

01:39:55 and it's actually fairly cheap, right,

01:39:58 but they have one option,

01:40:00 and it's fairly cheap for the buy-in.

01:40:03 At some point, those folks who have then bought

01:40:05 into those plans are gonna have their rates increased

01:40:09 if there isn't competition,

01:40:10 and so I think what we need to do

01:40:12 is ultimately focus on supply,

01:40:14 ultimately focus on competition,

01:40:16 and that's what will bring those rates down

01:40:17 in a sustainable way at some point in the future.

01:40:20 - And I'm over time, and excuse me if I might.

01:40:23 I understand, and I, no, no, no,

01:40:25 I agree with you fundamentally,

01:40:28 except it is so damn expensive to lay broadband,

01:40:32 and in rural America, I don't know

01:40:34 how you're ever gonna get competition.

01:40:35 I just don't know, unless we're willing

01:40:37 to lay several lines or, God, I don't know,

01:40:41 you guys probably make rules

01:40:43 that force other companies to be able

01:40:44 to use the lines or whatever.

01:40:46 There's all sorts of stuff out there,

01:40:47 but I just don't know how we,

01:40:49 and in a grocery store, yeah,

01:40:51 we get more food manufacturers,

01:40:52 and energy, we'll get more people

01:40:54 that are creating energy,

01:40:55 whether it's carbon-based or renewable.

01:40:59 There's things we can do in those,

01:41:01 and this one, it's just a different marketplace

01:41:04 that somewhat holds the consumer at a big disadvantage.

01:41:09 You don't have to say anything,

01:41:12 but I had to get that off my chest, thanks.

01:41:14 - Thank you very much, Senator Tester.

01:41:16 Senator Markey, you recognize your question?

01:41:18 - Yep, thank you, Mr. Chairman.

01:41:20 I agree with everything Senator Tester just said.

01:41:23 I also wanna take a moment to celebrate

01:41:26 the FCC's vote last week

01:41:28 to reinstate critical net neutrality rules.

01:41:31 The new rules are important to protect

01:41:34 the free and open internet,

01:41:36 and the evidence shows clearly

01:41:37 that the rules do have no impact

01:41:40 on broadband investment in the country,

01:41:43 so just congratulations to the FCC.

01:41:46 As everyone knows, we're at a crisis point

01:41:49 for the Affordable Connectivity Program.

01:41:52 May is the first month when ACP households

01:41:55 will not receive the full $30 discount

01:41:58 on their monthly broadband bill.

01:42:00 Instead, that discount will only be $14,

01:42:02 which is less than half of the subsidy.

01:42:05 For households on tribal lands,

01:42:07 the May benefit is just $35,

01:42:10 down from $75 previously,

01:42:12 and I'm deeply concerned that,

01:42:14 faced with this cost increase,

01:42:16 many ACP beneficiaries will drop their internet service,

01:42:20 and that would be a huge loss.

01:42:21 That is why last week I led my colleagues

01:42:23 in a letter to the trade associations

01:42:26 of the major ACP corporations

01:42:30 and urged them to cover the shortfall

01:42:33 in the May benefit.

01:42:34 Given that the $14 billion in ACP benefits

01:42:37 ultimately returns to the corporations,

01:42:41 who are the providers,

01:42:43 this money is a small price to pay

01:42:46 for ensuring that ACP households

01:42:48 receive a full discount in May.

01:42:50 Mr. Levin, do you agree that providers

01:42:55 should ensure that ACP households

01:42:57 receive the full $30 benefit in May?

01:43:01 I certainly hope that they follow your advice

01:43:04 and do that.

01:43:06 I would only add to that that

01:43:07 voluntary efforts are not a long-term solution.

01:43:11 We need a long-term solution.

01:43:13 I was very supportive, as you know,

01:43:16 for initiatives like Comcast Internet Essentials

01:43:20 and other kinds of things, very helpful,

01:43:22 but it was not a solution to get everybody on,

01:43:26 which is what we really need.

01:43:27 Yeah, so the corporations should help us

01:43:29 to create a bridge here,

01:43:31 to combine a solution.

01:43:31 Bridges are good.

01:43:32 They get the primary benefit financially out of this,

01:43:37 and we just have a short window

01:43:39 to get this solved,

01:43:43 and we just don't want these households

01:43:45 to lose their critical benefits.

01:43:48 And as we consider proposals

01:43:50 to reform the Universal Service Fund,

01:43:52 we must make sure to protect existing programs

01:43:56 that have been instrumental in closing the digital divide.

01:43:59 At the top of that list is the Universal Service Program

01:44:02 for schools and libraries, better known as E-Rate.

01:44:06 So I was the Democratic author of the E-Rate program.

01:44:10 I actually named it the E-Rate program.

01:44:13 I was gonna call it the Ed-Rate,

01:44:15 but then my staff said, "Nah, you can't do that, okay?

01:44:19 "We'll just call it the E-Rate for education."

01:44:21 So I did that in 1996.

01:44:23 Named it, created it.

01:44:25 And so the program has delivered over $60 billion

01:44:28 to connect schools and libraries to the internet,

01:44:32 including $900 million for Massachusetts.

01:44:35 And that money has primarily flowed to disadvantaged

01:44:37 and low-income communities across the country.

01:44:40 So, Mr. Levin, you were there in 1996.

01:44:43 - As were you, yes. - At the FCC to implement it.

01:44:45 Do you agree that any changes

01:44:46 to the Universal Service Fund must protect E-Rate?

01:44:50 - I certainly agree that it should protect E-Rate

01:44:52 and the mission of E-Rate.

01:44:54 I would just note, 'cause I think it's important,

01:44:56 you know, you and I have both aged a little bit.

01:44:59 I think we may be the only people in this room

01:45:01 who were there in '96. - Staying ourselves, yeah.

01:45:02 - I was gonna say, you have aged much more gracefully

01:45:05 and much more beautifully than I have,

01:45:07 but the E-Rate program has also aged extremely well.

01:45:11 But, you know, we did have to do some reforms,

01:45:14 and I think the FCC's reforms were in 2014,

01:45:18 and those reforms were great.

01:45:20 And if you look at the Education Superhighway report

01:45:23 from 2019, you can see that the reforms led

01:45:27 to a number of tremendous improvements for the state.

01:45:29 So we should absolutely protect E-Rate,

01:45:33 we should absolutely protect this mission.

01:45:35 But I would be open to, you know,

01:45:38 things that make it even better.

01:45:39 So that is the challenge.

01:45:42 ACP is part of a broader mission

01:45:45 to make sure that everybody's connected

01:45:47 to the tools they need, as Congress said,

01:45:48 to fully participate in the economy and society.

01:45:51 - Yeah, so it's actually, it's not your age,

01:45:54 it's the age of your ideas.

01:45:56 I like to think of myself as still

01:45:57 the youngest guy in the room.

01:45:58 So E-Rate has stood the test of time.

01:46:01 You know, if it can be improved, that's fine,

01:46:03 but it's survived the test of time.

01:46:07 So any changes must be carefully calibrated

01:46:10 to elicit a solution that actually improves it

01:46:13 and doesn't undermine it.

01:46:14 And ACP is exactly the kind of program

01:46:18 that does show how government and industry

01:46:21 and community organizations can all work together.

01:46:25 And we just have to continue that tradition

01:46:27 and ensure that as we move forward,

01:46:31 we do so with a consensus.

01:46:34 And we just want to keep this program going

01:46:36 because if it fails, it just will undermine public trust

01:46:41 because it will just be a failure

01:46:43 on the part of the government and the private sector

01:46:47 to come to a solution that helps community organizations

01:46:50 provide that service.

01:46:51 And thank you, Mr. Chairman and Ranking Member

01:46:55 for all of your great work on this program.

01:46:57 - Thank you, Senator Markey.

01:46:58 Senator Rosen, you're recognized for questions.

01:47:01 - Well, thank you, Chairman Lujan,

01:47:02 of course, Ranking Member Thune.

01:47:04 It's really important we hold this hearing today.

01:47:07 And I thank all the witnesses for being here

01:47:09 because earlier this week, we crossed a new threshold.

01:47:13 The end of April marked the last month

01:47:16 that households will see, of course, as everyone has stated,

01:47:18 the full $30 ACP benefit on their internet bills.

01:47:23 I was proud to help write and pass the broadband section

01:47:26 of the bipartisan infrastructure law,

01:47:28 which created the Affordable Connectivity Program

01:47:31 to lower internet costs for Nevadans

01:47:34 and people across the country.

01:47:36 But due to congressional inaction,

01:47:38 there are people today already seeing higher costs

01:47:41 because the program's funding has run out.

01:47:44 I remain committed to finding a path forward to save ACP

01:47:47 to ensure high-speed internet is not only accessible,

01:47:50 but affordable to working families in Nevada,

01:47:53 and the time has run out,

01:47:55 and that means the time to act is now.

01:47:57 And so I wanna talk a little bit on some of the impact

01:47:59 for my Nevada seniors and my Nevada veterans.

01:48:02 I wanna hone in on one of the points

01:48:04 Senator Vance made earlier.

01:48:06 Losing access to internet due to high costs

01:48:08 can also raise costs, like I said, for seniors,

01:48:11 for veterans, but even the federal government.

01:48:14 Federal agencies like the VA and Medicare

01:48:16 use telehealth and online services to save taxpayer funds

01:48:20 and provide more timely assistance to veterans and seniors.

01:48:24 Telehealth, I can't tell you how important it is

01:48:27 to people in our rural communities, in rural Nevada.

01:48:31 It matters, it makes a difference.

01:48:33 They're getting their care this way.

01:48:35 It's saving lives.

01:48:37 Sometimes the nearest in-person service

01:48:40 is hundreds of miles away.

01:48:42 So Mr. Levin, on my ACP lapsing,

01:48:45 they get harder for veterans to access their benefits,

01:48:49 and especially when they go through the VA.

01:48:52 - It does it in a variety of ways.

01:48:55 One of the interesting things that's been developing

01:48:57 in the last few years is because of ACP,

01:49:00 there are a lot of social service providers,

01:49:02 both in the government,

01:49:03 but also in the nonprofit communities

01:49:05 that are restructuring the way.

01:49:06 They now have an incentive to restructure

01:49:10 how they deliver those services

01:49:11 to make it more effective, more efficient,

01:49:14 to allow people to get help 24/7 instead of nine to five.

01:49:18 So it can affect veterans who depend on

01:49:21 a variety of government services,

01:49:23 not just with healthcare,

01:49:24 though healthcare is probably the number one way.

01:49:27 But if they get cut off,

01:49:29 if they can't afford internet connectivity,

01:49:32 then everything they do to try to make their lives better

01:49:35 will become more difficult.

01:49:37 - Yeah, I think the same thing would go for our seniors

01:49:40 and for many of our social service agencies

01:49:42 that work all around our state.

01:49:43 So Mr. Chairman, I'd like to enter into the record

01:49:46 a letter from health plans across the US

01:49:49 in support of continuing to fund the ACP.

01:49:52 - With no objection.

01:49:54 - Thank you.

01:49:55 I'm gonna move on and talk a little bit in the time left

01:49:58 about broadband multipliers.

01:50:00 So research has identified broadband adoption

01:50:03 as a super multiplier.

01:50:06 What does that mean?

01:50:07 Just like we talked about,

01:50:08 increases access to healthcare,

01:50:09 creating more opportunities for tele-education and for jobs.

01:50:13 And well, I would say in Nevada for tourism as well.

01:50:17 And so Mr. Levin, how can you talk about

01:50:20 the downstream effects of broadband affordability?

01:50:23 How does affordable access to the internet connection

01:50:27 spur better educational outcomes, health outcomes,

01:50:30 better jobs, just increase all of our connections

01:50:34 and our ability to move all around our state,

01:50:36 particularly in our underserved and rural areas

01:50:39 and this laps in ACP, how does it reverse those benefits?

01:50:43 - Yeah, I think you've hit upon a key point here,

01:50:46 which is, as I mentioned in the oral testimony,

01:50:49 broadband internet access

01:50:51 is really a general purpose technology.

01:50:53 It is like electricity as Senator Tester was saying,

01:50:56 in the sense that it doesn't enable one thing,

01:50:59 it enables lots of things.

01:51:01 And so all of those things that you mentioned are improved.

01:51:06 Earlier we were talking about

01:51:09 job training and job placement.

01:51:10 Now by the way, again, artificial intelligence

01:51:12 is going to change the way people do jobs,

01:51:16 change the way that they have to keep learning and learning.

01:51:20 You're not gonna do that by going to

01:51:24 community colleges live all the time.

01:51:26 You're gonna do it at home, at night.

01:51:28 So you're gonna keep upgrading your skills.

01:51:30 And then how do you find that job?

01:51:32 The majority of jobs, the vast majority of jobs

01:51:35 are now posted only online.

01:51:36 So that's a benefit to everybody,

01:51:39 but that's just one of a thousand examples we could use.

01:51:41 - Well, thank you.

01:51:44 I have so much more to talk about our impact

01:51:46 in rural communities and infrastructure investments

01:51:49 that how we're gonna expand the digital divide

01:51:52 if we don't fund ACP

01:51:54 and just create more and more inequities.

01:51:56 I will submit those questions for the record.

01:51:58 I see my time is up.

01:52:00 Thank you.

01:52:01 - Thank you, Senator Rosen.

01:52:03 And before I close with no other speakers expected,

01:52:07 I have a couple other questions.

01:52:09 Mr. Witten, your work at Pew,

01:52:11 you've assisted states in determining

01:52:14 what constitutes reasonable prices for broadband

01:52:17 for a middle-class family, correct?

01:52:19 - Yes, that is correct.

01:52:21 - Now it's my understanding that your work found that

01:52:24 affordability can vary widely across regions,

01:52:27 states and counties.

01:52:28 For example, the median affordability price for Texas

01:52:31 is listed at $92.80.

01:52:34 In DeMint County in South Texas,

01:52:35 the affordable baseline was $41.67.

01:52:39 And in Rockwell County,

01:52:41 located in the Dallas-Fort Worth Metroplex,

01:52:43 affordability was $185.99.

01:52:47 Mr. Witten, what are some of the reasons

01:52:49 for such wide pricing differences

01:52:51 in different states and counties?

01:52:53 - Simply put, more research is needed to confirm that.

01:52:58 What we know at this point are that

01:53:00 there are a range of factors that do influence affordability,

01:53:04 including the type of service that is available,

01:53:07 as well as simply put what a customer can afford.

01:53:11 And further, that research, which I should point out,

01:53:16 is based on a 2% evaluation of middle income.

01:53:21 And, sorry, I won't go down on methodology,

01:53:24 you don't need to hear about that.

01:53:26 But I think what's important to note is that

01:53:30 what we found, even with those ranges,

01:53:31 are that that middle, that 2% number

01:53:35 of what could be affordable for a middle class

01:53:39 is still more expensive than what many families can afford.

01:53:43 But fundamentally, there are a range of economic,

01:53:46 social, and educational factors

01:53:48 that influence affordability for households.

01:53:50 - Appreciate it.

01:53:51 Senator Hickenlooper, you are recognized for your question.

01:53:55 - Thank you, Mr. Chair.

01:53:56 Thanks to all of you, I've caught bits of this

01:53:59 through the morning.

01:54:01 Let me start with a question for Ms. Case-Nevarez.

01:54:05 During the pandemic, students nationwide

01:54:09 had to adapt to learning remotely.

01:54:11 Many had limited experience beforehand.

01:54:14 Students without any broadband connection or a device

01:54:20 were disadvantaged, could not keep up with their peers.

01:54:25 I think the digital divide is not just about

01:54:29 broadband access, but about broadband adoption and use.

01:54:34 So can you describe how you've seen this relationship

01:54:40 between broadband adoption and education evolve

01:54:44 over the last couple years?

01:54:47 - Sure, in our state in particular,

01:54:51 it has been a critical issue that the nation is watching.

01:54:55 Community members, particularly our tribal community members,

01:54:59 Hispanic community members,

01:55:00 some of our disabled community members,

01:55:03 have actually gone to the state

01:55:04 to address equality of education.

01:55:08 And a tech order came out to note

01:55:11 the importance of technology

01:55:13 and the critical need for our students

01:55:15 to actually have both connectivity and a device.

01:55:19 Our state is rallying now to address those needs,

01:55:22 and it is not easy.

01:55:24 The cost of devices, the cost of maintenance of devices,

01:55:27 and of course, as we've mentioned here today,

01:55:30 connecting many of our rural students,

01:55:32 some of which actually in Navajo Nation,

01:55:34 believe it or not, ride the bus two hours

01:55:38 to get to school every day.

01:55:40 So as we've noted, in our state,

01:55:43 getting fiber to a home that far away,

01:55:48 over canyons and mountains, is expensive,

01:55:51 and the cost, if there even is a choice, is expensive.

01:55:55 We sit here in D.C., there's 11,000,

01:55:58 more than 11,000 people per square mile.

01:56:01 In the state of New Mexico, it's an average of 17.

01:56:04 So even if a family wants their student

01:56:08 or wanted their student to be able to connect,

01:56:10 it's often not an option

01:56:13 or it's an expense they can't handle.

01:56:16 It has cost our students,

01:56:18 many of them returning to school post-pandemic,

01:56:21 the challenge of catching up

01:56:25 and the challenge of proceeding forward

01:56:28 as we as a state look at how are we going to ensure

01:56:32 all students all the time have technology and access

01:56:36 as a tool for learning and advancing.

01:56:39 It's a heavy lift for us and a heavy lift for every state,

01:56:42 but a lift we cannot delay and we cannot avoid.

01:56:47 - Right, thank you.

01:56:48 And I've got two more questions,

01:56:50 so hopefully we'll get 'em.

01:56:52 I'll be concise in asking and you can get concise answers.

01:56:55 Ms. DeWitt, the E-Rate program, the Lifeline program,

01:57:01 the Rural Health Care program

01:57:02 to support hospitals and clinics,

01:57:04 what they call the high-cost program

01:57:06 to help expand access in rural America.

01:57:11 During the pandemic, Congress authorized these programs

01:57:15 to get to the same goals as the Universal Service Fund

01:57:20 through direct appropriations and unique appropriation rules.

01:57:23 How would you advise Congress

01:57:26 to combine these pandemic-era programs

01:57:28 with the Universal Service Fund

01:57:30 to be sustainable long-term?

01:57:32 - At this point, we don't have research on that issue

01:57:38 to provide an informed answer.

01:57:40 What we do know is that USF reform is needed.

01:57:43 That's also a question that is worthy of debate

01:57:47 and further research,

01:57:49 and which we would be happy to participate in

01:57:52 as time moves forward.

01:57:53 But I think the critical point for us

01:57:56 is that ACP is the cornerstone of BEAT.

01:57:59 And without ACP, without a bridge for funding ACP,

01:58:03 we threaten billions in deployment grants

01:58:07 across the country.

01:58:08 So we hope that we find a short-term solution for ACP

01:58:11 and a longer one for USF reform.

01:58:13 - Get you back to work,

01:58:15 full-time employment for researchers, this issue.

01:58:18 Mr. Levin, or Levin, I missed the beginning introductions.

01:58:24 It's like hick and looper, hick and lopper, either way.

01:58:27 That same question, we're looking at,

01:58:30 I mean, the issue of, as I grew up,

01:58:33 everyone paid in a little bit into a fund

01:58:36 to make sure that everybody had telephone coverage

01:58:40 and was connected.

01:58:41 We've introduced something called

01:58:45 reforming broadband connectivity

01:58:46 with Senators Klobuchar and Thune,

01:58:49 finally trying to get the FCC to take action

01:58:52 by basically expanding the contribution base

01:58:57 to make sure that we have sufficient resources.

01:58:58 So in your view, what is currently

01:59:01 within the FCC's authority

01:59:03 to expand the contribution base to?

01:59:06 Like broadband providers.

01:59:08 And what is not within their authority

01:59:12 without congressional legislation?

01:59:13 - I think they could expand it to broadband providers.

01:59:19 I don't think they could expand it

01:59:21 to certain kinds of big tech operations

01:59:23 as has been proposed by a number of different people.

01:59:25 And I would be happy to also participate

01:59:30 in any further discussions.

01:59:31 I was involved in the '90s.

01:59:33 I was involved 10, 15 years ago

01:59:36 in terms of various reforms.

01:59:37 There's no question that there's a broader reform necessary.

01:59:41 But the single most important point

01:59:43 that I think this hearing demonstrates

01:59:45 is we need to keep everybody on.

01:59:47 The government actually saves money by keeping people on.

01:59:50 So let's have a short-term extension

01:59:52 and let's get to the work.

01:59:54 This is not the Middle East.

01:59:55 We can solve this problem.

01:59:57 And we can solve it in a reasonably short period of time.

02:00:01 And we should look at a lot of different options

02:00:04 for how to do it.

02:00:05 I might note there's some court cases pending

02:00:07 that may affect those options.

02:00:09 But I think fundamentally this is a congressional decision

02:00:13 and it should be a congressional decision.

02:00:15 And let's make that decision and let's move on.

02:00:17 And then 15 years later, there'll be another hearing

02:00:19 and we'll have to reform it all over again.

02:00:21 But that's fine because that's the truth

02:00:23 of every program that's ever occurred.

02:00:27 - Well, I appreciate that.

02:00:29 And I look forward to keeping you all busy

02:00:31 in the years to come 'cause it is important.

02:00:33 And I have not had a single citizen

02:00:38 while the eight years I was governor of Colorado

02:00:42 who when explained the theory

02:00:44 behind everyone paying a little bit more

02:00:46 to make sure that everyone had some access,

02:00:49 no one ever complained about that.

02:00:50 So it is befuddling to say the least

02:00:55 that we can't seem to find out that solution

02:00:57 that is sitting there right in front of our face.

02:01:00 Anyway, I yield back to the chair.

02:01:01 Thank you all.

02:01:03 - Thank you, Senator Hickenlooper.

02:01:05 And I'm asking the committee to submit a statement

02:01:09 for the record from R Street,

02:01:12 which is a self-described center-right think tank

02:01:15 that engages in policy research

02:01:17 in support of free markets

02:01:19 and limited effective government without objection.

02:01:22 The study also state something that I agree with,

02:01:27 which is R Street states

02:01:29 that the Affordable Connectivity Program

02:01:31 is quote a model of success

02:01:32 and that quote has been a bright,

02:01:36 pardon me, quote has been a bipartisan program

02:01:39 since its inception,

02:01:40 and it should remain so moving forward.

02:01:43 I would also like to highlight research

02:01:45 that R Street Institute Statements mentions,

02:01:47 which takes a look at the effect ACP has had

02:01:50 on the price of broadband

02:01:52 by comparing broadband price offerings

02:01:54 by companies who participate in ACP

02:01:57 with similar offerings by companies

02:01:59 who do not participate in ACP.

02:02:01 The study demonstrates that ACP

02:02:03 is successfully reducing the cost of internet plans

02:02:06 for eligible households.

02:02:08 The study also finds that ISPs

02:02:10 are passing on cost savings to their customers.

02:02:14 Mr. Levin, yes or no, in any of your research,

02:02:16 have you seen evidence that the ACP itself

02:02:19 is driving broadband prices higher?

02:02:21 I appreciate that very much.

02:02:24 - But yeah, on Wall Street, right, that.

02:02:28 - I appreciate that.

02:02:30 And look, I hope that these programs

02:02:33 will eliminate slow speeds across America.

02:02:37 I live in a rural community.

02:02:40 I represent a very rural state.

02:02:42 Most access to the internet is still over twisted copper.

02:02:48 I was a former utility commissioner

02:02:50 before I came to the Congress.

02:02:52 So doing something about POTS,

02:02:54 and that's not what everyone's trying to legalize now,

02:02:57 that's plain old telephone service,

02:02:59 which was delivered over twisted copper,

02:03:01 and then some really smart engineers figured out,

02:03:03 well, we can increase capacity on twisted copper.

02:03:07 And then the world said, and all these corporations said,

02:03:10 oh, that's how people living in rural America

02:03:13 will get faster speeds.

02:03:15 You know, we're gonna boost them up from a dial-up tone,

02:03:19 and some of you in the room may remember it,

02:03:21 but you don't have the same color of hair as I do.

02:03:24 But you used to go to download an email,

02:03:26 not all your email, an email,

02:03:28 and you would log in to AOL or whatever account you had,

02:03:32 and you would hit Enter,

02:03:35 and the phone would start,

02:03:36 bzz, bzz, bzz, you know,

02:03:38 and everything would start talking to one another,

02:03:40 and you'd leave for the day.

02:03:43 And you would come home to watch it

02:03:46 maybe finally downloading the one email.

02:03:49 Unfortunately, that's how broadband providers

02:03:54 across the world said,

02:03:55 rural America, that's what they get.

02:03:58 We're gonna solve this problem.

02:04:00 Building a bipartisan deployment plan to rural America said,

02:04:05 well, not anymore.

02:04:06 In the same way that my colleagues asked about electricity

02:04:09 and roads and this revolution across America

02:04:12 to say that everyone matters,

02:04:14 we're gonna make sure that we get this done

02:04:15 all across the country,

02:04:17 we're finally doing the same thing with broadband.

02:04:20 Dr. Winfrey, the one area that I disagree,

02:04:22 well, there may be a few areas.

02:04:25 The one area that I'll highlight,

02:04:27 ACP does help rural America.

02:04:31 Things in rural America are expensive too.

02:04:34 I hope more programs look to rural America

02:04:39 where most of our food is grown.

02:04:42 There's an effort now to be smarter

02:04:44 with the use of tractors like the ones

02:04:47 that my colleagues at Farm on Large Acreage

02:04:50 to modernize them.

02:04:51 You know, I still use the ones

02:04:53 that you have to put it around in

02:04:55 because it's small acreage.

02:04:56 It doesn't make sense for me.

02:04:57 Rural electric co-ops are a present service to us

02:05:04 across the country because people believe

02:05:08 that rural Americans deserved electricity too.

02:05:13 And I'm certainly hopeful that with these programs

02:05:18 that we can eliminate slower speeds.

02:05:22 That we can finally get higher speed connectivity

02:05:27 to people living all across America.

02:05:30 And where competition doesn't exist, well, then what?

02:05:34 I don't know if I'm hearing that we should overbuild.

02:05:38 I'm surprised I used those terms

02:05:42 'cause I don't use those terms.

02:05:43 I don't know what overbuild means.

02:05:47 In order to get competition for broadband,

02:05:52 you need a few pipes or you need a lot of fiber in a pipe

02:05:56 so that other people can be able to get that service to you.

02:06:00 Well, that's called overbuilding.

02:06:02 They used to call it gold plating

02:06:03 when I was on the Public Utility Commission.

02:06:07 And it was all the rural telephone cooperatives

02:06:09 who would get called out for gold plating.

02:06:11 And now we applaud them for being smart and innovative

02:06:14 and making these investments.

02:06:16 Where you had innovative boards,

02:06:19 they had some of the fastest connections in America.

02:06:22 We should model after them.

02:06:23 We should look after what they've been able to achieve.

02:06:26 So I'm just going on and on here.

02:06:28 I hope that we can find a way to work together

02:06:31 as the bipartisan working group with USF

02:06:35 has come up with really strong ideas.

02:06:38 Democratic ideas, Republican ideas,

02:06:43 thoughts that have come out of studies from the right

02:06:45 and the left, from the center.

02:06:47 And it's a good methodology that I'm hoping

02:06:51 that going forward, programs will work better,

02:06:55 that they touch the people

02:06:56 that they are intended to reach out to.

02:06:59 That whether we're in rural settings, urban settings,

02:07:02 that where we have a hole and a flaw in American policy,

02:07:07 that we can do something about that as well.

02:07:10 So thank you to each of the witnesses

02:07:14 for being available today, for traveling,

02:07:16 for the preparation it takes to be able to come together

02:07:20 and have a good conversation.

02:07:22 I appreciate all my colleagues who participated today.

02:07:24 There's a lot of interest in this particular space.

02:07:27 And before I wrap up,

02:07:29 I want to enter a few more things into the record.

02:07:32 And I ask unanimous consent to enter a statement

02:07:37 from February 8th, 2024,

02:07:39 from the Wireless Infrastructure Association

02:07:42 in support of extending ACP,

02:07:44 a January 10th, 2024 statement from NCTA,

02:07:48 the Internet and Television Association

02:07:50 in support of extending ACP,

02:07:53 a January 10th, 2024 statement from CTIA

02:07:56 in support of extending ACP,

02:07:59 a January 10th, 2024 statement from NCTA,

02:08:03 the Rural Broadband Association in support of extending ACP,

02:08:08 on April 15th, 2024 statement from T-Mobile

02:08:12 in support of extending the ACP,

02:08:14 and a statement for the record from AARP

02:08:17 in support of ACP and sharing research findings

02:08:21 about the importance of the programs for older Americans.

02:08:25 I think we can get there.

02:08:27 We can find a way to work together.

02:08:30 We can address concerns to ensure that we're gonna have

02:08:33 real broadband connectivity across the country

02:08:37 that's fast and that's affordable.

02:08:39 Now, we know the stakes are simply too high,

02:08:42 especially with our veterans and students,

02:08:45 families, rural and older Americans.

02:08:48 So over the next week,

02:08:49 I'm committed to continue working with my colleagues

02:08:51 to extend this program,

02:08:53 and once we do that,

02:08:54 I look forward to bringing forth this long-term solution

02:08:57 to permanently fund these programs with reforms

02:09:00 with the work of the Universal Service Fund Working Group.

02:09:04 Now, with that, I will close the hearing.

02:09:06 Should members have additional questions for the witnesses,

02:09:08 for the record,

02:09:10 I ask that they submit them to the committee

02:09:12 within two weeks,

02:09:13 and witnesses will have an additional two weeks to respond.

02:09:18 So everyone, thank you so very much for your time.

02:09:20 I thank the staff for helping us get this done.

02:09:22 This hearing is closed.

02:09:23 (gavel bangs)

02:09:26 [BLANK_AUDIO]

Senate Commerce Committee Holds Hearing About Major Broadband Affordability Programs

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