Senate Commerce Committee Holds Hearing About Major Broadband Affordability Programs
The Senate Commerce, Science and Transportation Committee held a hearing entitled, "The Future of Broadband Affordability."
Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:
https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript
Stay Connected
Forbes on Facebook: http://fb.com/forbes
Forbes Video on Twitter: http://www.twitter.com/forbes
Forbes Video on Instagram: http://instagram.com/forbes
More From Forbes: http://forbes.com
Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:
https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript
Stay Connected
Forbes on Facebook: http://fb.com/forbes
Forbes Video on Twitter: http://www.twitter.com/forbes
Forbes Video on Instagram: http://instagram.com/forbes
More From Forbes: http://forbes.com
Category
🗞
NewsTranscript
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]