Lessons from Google Fiber: why coordinated cost reductions to infrastructure access are necessary to achieve universal broadband deployment.

Author:Trogdon, Holly
 
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TABLE OF CONTENTS I. OVERVIEW II. THE ROAD TO GOOGLE FIBER A. Universal Broadband: A Call to Action B. Why Rights-of-Way Matter if Universal Service is to Become a Reality C. Google Fiber as a Case Study: Eliminating Rights-of-Way Fees III. FEDERAL ACTION TO REDUCE INFRASTRUCTURE ACCESS COSTS. A. Dig Once." Congressional and Executive Action B. The Impact of a Dig Once Policy C. Responses to the FCC's Rights-of-Way Inquiry IV. A COORDINATED APPROACH TO COST REDUCTIONS A. What the FCC Can Do to Incentivize Deployment 1. The FCC Does Not Have Authority Under Section 253(a) to Preempt Rights-of-Way Matters Relating to Broadband Deployment Unless It Redefines "Telecommunications Services" 2. While Section 706(b) Arguably Allows the FCC to Preempt Rights-of-Way Matters Related to Broadband, It Should Not Act Beyond Its Authority Under Section 253. 3. The FCC Should Provide Resources for Service Providers and Local Governments B. Congress Should Expand the FCC's Jurisdiction to Collect Meaningful Data to Assist with Deployment C. States Should Consider Revising Rights-of-Way Policies to Provide Certainty to Providers, Including "Dig Once" Policies V. CONCLUSION I. OVERVIEW

Residents of Kansas City are over the rainbow. In 2011, Google announced after a competitive selection process (1) that Kansas City would become the first test site for its experimental project: Google Fiber. (2) Google agreed to build, operate, and maintain a fiber-to-the-home network in Kansas City, boasting speeds of up to one gigabit per second. (3) The service delivered to residents in Kansas City will be provided at speeds faster than the FCC's 2015 goal for households, (4) at a cost to consumers of only $70 a month. (5)

Google Fiber's publicity thrusts the challenge of obtaining rights-of-way access to build out infrastructure for broadband deployment to the forefront of the public policy debate. (6) The publicity of the Google Fiber project attracted FCC Commissioner Ajit Pai to communicate the FCC's need to "remove barriers to infrastructure investment" in order to promote "job creation and economic growth." (7) Commissioner Pai's comments came just days after he visited the project's site, noting the importance for "states and local communities to adopt broadband-friendly policies when it comes to rights-of-way management." (8) Commissioner Pai encouraged others to take the demonstrated success of the Kansas City-Google partnership and use it to inform how they could "streamline their own rights-of-way management processes," mentioning that the city's attractive policies were the reason Google chose it for its innovative project. (9)

Commissioner Pai announced that the FCC should play a role in developing "model regulations, guidelines, or best practices for rights-of-way management that facilitate fiber deployment while safeguarding legitimate government interests." (10) He emphasized that streamlining rights-of-way management is necessary for "21st century challenges" like broadband deployment. (11) In fact, Google publicly stated that one of the reasons it chose Kansas City was because "the City's leadership and utility moved with efficiency and creativity." (12) Part of the agreement between Kansas City and Google included providing Google complete access to Kansas City's rights-of-way. (13)

One would think that with a company as large as Google, Kansas City would be able to collect fees for the unlimited access it gave to Google, but in fact, Kansas City waived all fees to its rights-of-way. (14) Those following the project noted that the concessions Kansas City provided were more than just an example of the effects of deregulation on the market, but instead were an actual taxpayer subsidy, and further observed that these subsidies are necessary to incentivize deployment. (15) Others claim that Google would have still paid Kansas' rights-of-way fees, but selected the city because it eliminated "'unnecessary costs and delay," in the deployment process. (16) Regardless of their characterizations of why Google chose Kansas City, observers agree that more needs to be done to encourage investment in infrastructure to deploy high-speed broadband technology. (17) Certainly, rights-of-way fees make up only one part of costs that providers like Google face when engaging in deployment projects.

With the spotlight on Google Fiber, the FCC is in a perfect position to utilize the lessons learned from the Google-Kansas City partnership to evaluate what can be done to encourage Internet service providers ("ISPs") to upgrade their existing networks or deploy new networks where access is lacking. Earlier this year, Julius Genachowski, then FCC Chairman, called for at least one city in every state to have a gigabit community, (18) echoing the National Broadband Plan's goal of "affordable access of at least [one] gigabit ... broadband service to anchor institutions such as schools, hospitals and government buildings." (19) Additionally, if the FCC wishes to achieve its goal of universal service, (20) it must take heed of Commissioner Pai's statement that rights-of-way management plays a vital role in broadband deployment projects. (21)

Before the FCC acts, however, it must consider a variety of issues. The FCC has three players at its doorstep: ISPs, consumers, and local government. (22) First, ISPs have called for greater deregulation of rights-of-way access in order to increase certainty that they can access existing infrastructure swiftly. (23) Second, consumers want faster broadband speeds at reasonable prices. (24) Lastly, states have not abandoned the fight that rights-of-way represent a property interest, (25) and the federal government should not impose restrictions on states' ability to impose fees beyond cost for access, (26) especially when states serve the interests of their residents through decisions to approve enhancements to existing networks. (27)

If it does act, the FCC will also have to keep in mind recent initiatives by the executive branch, the current state of Congress, and future judicial scrutiny of its authority. The Obama administration has called for more efficiency in federal processes, including implementation of a "dig once" policy to coordinate broadband deployment with other road and utility projects. (28) While it appears unlikely that Congress will make drastic expansions to the scope of the FCC's jurisdiction to regulate broadband given the current state of political division and other more pressing initiatives, (29) appropriate congressional action would play a vital role in stimulating our economy. (30) Although Congress was unsuccessful in passing a mandatory "dig once" policy, (31) it still has a meaningful role to play in supporting rights-of-way reform.

As the FCC takes steps to achieve universal service, it should be mindful that although access to rights-of-way is necessary for deployment, management of rights-of-way requires a delicate balance between federal regulation and states' rights. (32) Further, as evidenced by Google Fiber, elimination of state and local rights-of-way fees is not itself sufficient to encourage universal broadband deployment. (33) This Note addresses why a coordinated approach to reducing costs related to infrastructure access for broadband deployment is necessary and will help the FCC move closer to its goal of universal service. It argues that the FCC should refrain from a one-size-fits-all regulatory approach to rights-of-way, and instead should encourage broadband deployment by improving resources available for state and local governments. This will necessarily require Congress and the states to support the FCC's effort through related initiatives. Section II of this Note surveys the current status of broadband deployment, the importance of infrastructure access in achieving universal service, and why elimination of rights-of-way fees does not achieve that goal. Section III examines current federal policies fostering broadband deployment through rights-of-way policy. Section IV explains why coordinated action is necessary to reduce costs to access infrastructure for broadband deployment. Lastly, this Note proposes various cost-saving solutions by the FCC, Congress, and states, which can pave the way to cost reductions that will assist the FCC in achieving universal high-speed broadband deployment.

  1. THE ROAD TO GOOGLE FIBER

    1. Universal Broadband: A Call to Action

      The FCC called for universal broadband service for all Americans in its National Broadband Plan in 2010. (34) In its 2012 broadband report, the FCC estimated that nearly "[n]ineteen million Americans [still] live where fixed broadband networks do not reach; 14.5 million of those live in rural America." (35) But it is not just rural Americans that are without a critical benefit (36): only 40% of Americans with access to broadband possess speeds deemed sufficient by the FCC. (37) Additionally, 142 million Americans rely on mobile connections, (38) which also require a "robust and reliable underlying wireline network." (39) Even in metropolitan areas, wireline broadband infrastructure in the United States lags behind other countries, which affects its economic competitiveness. (40) The challenge for consumers is not only obtaining access, (41) but also possessing access at speeds that are affordable. (42)

      Even Google acknowledges that "[w]hile it is necessary that broadband infrastructure be available to all Americans, mere availability is not sufficient." (43) As many businesses move to online platforms, robust and widespread access assists in connecting low-income residents with economic opportunities. (44) Access means more opportunities to telework for seniors and individuals with disabilities. (45) It means more jobs and increased property values, as more businesses are attracted to areas with high connectlvaty. (46) It also means increased educational opportunity for students, both at school and at...

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