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THE 2014 LEGISLATIVE OUTLOOK [Rural Telecommunications]
[February 17, 2014]

THE 2014 LEGISLATIVE OUTLOOK [Rural Telecommunications]


(Rural Telecommunications Via Acquire Media NewsEdge) POLARIZATION MALES FOR TOUGH PREDICTIONS The outlook for the 2014 legislative year is certainly not easy to predict. Last year saw budget battles of historic proportions, failure to pass a long-term Farm Bill, a government shutdown and many other smaller battles that have, in some cases, diverted attention from important ongoing issues facing the telecom industry. * So what does this mean for 2014? Pundits may believe that while we can assume the battles will be bigger and fiercer than last year, we honestly can't divine how they will turn out. During 2014, we will see a midterm election. With one-third of the Senate up for re-election and the entire House of Representatives standing for election, many politicians will have their attention divided, whether trying to figure out the best way to a majority on November 4 or how to set up their legacy policies.



The Senabe As James Madison made clear, the Senate is the "saucer" for the hot tea cup. The Senate has long been known as the place where policies are tempered and moderated from the House. It also has been the place in the last few years where deals have been made. Since senators represent a much more diverse population than most House members, they have more at stake to work together and are much more accustomed to seeking a path to 60 votes to ensure a clearer parliamentary path. This was very apparent during the most recent government shutdown, which ended when the Senate negotiated a deal to reopen the government (and the House signed on to the deal).

Some critical hearings from last year have set the stage for what to expect in the year to come. For instance, last year the Senate Commerce, Science and Transportation Subcommittee on Communications, Technology and the Internet, led by Chairman Mark Pryor (D-Ark.) and new Ranking Member Roger Wicker (R-Miss.), spent a great deal of time reviewing the telecommunications landscape. The subcommittee held a series of "state of" hearings that helped present current issues facing many different telecommunications providers.


The first hearing focused on rural communications, and John Strode, vice president external affairs for Ritter Communications (Jonesboro, Ark.) and a member of the NTCA Government Affairs Committee, provided the committee firsthand experience of the impact rural companies have felt because of the regulatory uncertainty that has taken hold since the FCC passed the Universal Service Fund (USF)Antercarrier compensation (ICC) transformation order. g The second hearing focused on video and was a opportunity to hear from both the broadcasters and cable providers on the challenges they face serving customers. It also provided an opportunity for the committee to hear about the ongoing retransmission consent battles and the increasing cost to provide content. That hearing was a preview of the expected battle over the renewal of the Satellite Television Extension and Localism Act of 2010 (STELA).

The third hearing, on wireless communications, included testimony from representatives of trade associations and network equipment manufacturers. The focus of this hearing was not only to discuss the current marketplace, but also the need to bring more spectrum online for companies to control in order to meet the demand of wireless customers. Additionally, the discussion focused on device interoperability for networks being built out on the 700 MHz band. Until small carriers, including many NTCA members, can obtain devices that will work across the spectrum bands, they will be held back from fully competing in the market.

NTCA Chief Executive Officer Shirley Bloomfield participated in the final hearing in the series on wireline communications. She focused not only on the troubling impacts NTCA members have felt because of the USF/ICC transformation but also on the future of wireline networks.

As for major legislative efforts, the retirements of longtime Senate leaders could have an impact on the policies that will be focused on in 2014. Max Baucus (D-Mont.), chairman of the powerful Finance Committee, was expected to focus on tax reform, but was recently appointed ambassador to China. He had already spent a great deal of time working with the Republican chairman of the House Ways and Means Commit tee, Dave Camp (Michigan). While many expect Baucus to put a full effort into tax reform, a comprehensive package in the next year is unlikely. Still, staff of the Finance and Ways and Means Committees should spend a great deal of time assembling a possible plan and, in many ways, structuring a comprehensive tax reform package. This will allow for future committees to use the plan as a blueprint.

House The House is the "tea cup" that James Madison referred to. Because of the 2010 redistricting efforts, many states sent congressional representatives to Washington, D.C., from polarized, gerrymandered districts. This process has created much safer districts where members tend to be more fearful of a primary election challenge than losing in a general election. The House is generally able to pass more legislation on party-line votes, which are how they have been able to pass so many pieces of legislation. Ironically, this ability has also restricted their ability to get those bills passed in the Democratic-led Senate.

This was never more apparent than when the House was unable to pass a comprehensive Farm Bill. Previous Congresses understood that while parts of the Farm Bill and the agricultural programs included in it mainly benefit rural areas of the country, the nutritional program in the bill benefits many parts of urban America. That is what enabled countless urban legislators to vote to support the agricultural programs, even though these programs had little benefit to their home districts. However, in 2013, the House was unable to pass a comprehensive Farm Bill because many of the members of the majority sought deep cuts to the Supplemental Nutrition Assistance Program, commonly referred to as food stamps. The Senate's version of the bill cut $3 billion annually; the House's original version cut $20 billion. After the failure to pass a full Farm Bill, the House separated the nutritional title from the rest of the agricultural titles and passed a nutritional title that cut $40 billion from the program. Additionally, the House refused to appoint a conference committee to negotiate the differences between the two chambers' bills until mid-October.

Looking ahead, here is what we know must happen before January 1, 2015. STELA expires this year. This law is typically passed as a "clean" extension, which means no other issue will be able to be inserted into the legislation. However, many groups would like to use this legislation as an effort to fix many of the other issues facing video content providers. The retransmission fight between CBS and Time Warner in the late summer of 2013 brought to light many of the issues facing broadcasters and video providers right now.

The fall of 2013 saw the second longest partial government shutdown in history. The deal that passed late on October 16, 2013, included provisions to compel the House and Senate Budget Committees to meet in what is known as a "conference committee" to work out the differences between the House and Senate passed budget resolutions. The budget resolution generally sets the top budget lines for the Appropriations Committees to use when passing each of the 12 separate bills to appropriate money to executive agencies. It is also commonly used to send "reconciliation instructions" to the House and Senate committees. For example, during this year's Senate budget resolution debate. Sens. Al Franken (D-Minn.) and Deb Fischer (RNeb.) offered an amendment that the government should be encouraged to "promote investments in broadband infrastructure through programs that expedite deployment of broadband to rural areas." Generally, the budget resolution is used as a messaging document for the House and Senate, as it is not signed into law by the president and cannot authorize new spending programs.

The current funding bill keeps the current spending levels through January 15, 2014, and allows for the debt ceiling to be raised until at least early February, though some are saying that the secretary of the Treasury can use extraordinary measures to pay bills through early March.

Universal Service Fund Overeighb The Lifeline program-the focus of much debate during 2013-is expected to remain controversial through 2014. In the Senate the issue was brought up during the debate over the budget resolution in the form of a few amendments. Members of the House also have introduced a few pieces of legislation to curtail growth in the program, but one piece would encourage broadband adoption programs.

The high-cost fund and the price cap carriers' Connect America Fund have received some congressional oversight. Members of Congress have been active in communicating directly to the FCC on the topic. The fall of 2013 saw a renewed effort for members of Congress to send letters to the then acting chairwoman Mignon Clyburn calling for action to restore regulatory certainty. NTCA later in the year issued statements welcoming new FCC Chairman Tom Wheeler and Commissioner Michael O'Rielly, and Bloomfield joined other telecom industry representatives for a meeting with Wheeler at FCC headquarters. During Chairman Wheeler's first House Energy & Commerce hearing, he announced to the committee that he has directed his staff to draft an order that would eleminate the QRA caps. NTCA welcomed this announcement and will continue to push the FCC for a sufficient and predictable support mechanism.

President Barack Obama's support of an updated E-Rate program through the ConnectED initiative has brought some attention from Congress on how to modernize that program. While many support ensuring our schools have the best network available, there is concern about how to increase speeds to schools without increasing growth in USE Sen. Jay Rockefeller (D-W.Va.) will be monitoring the process closely, as he was one of the original authors of the E-Rate program in the 1996 Telecommunications Act. He sees this update asa cornerstone of his legacy. Most of the policy action will be at the FCC, but it is anticipated that both the Senate and House oversight committees will be following the issue closely.

FinsbNeb The public safety interoperable network finally came into focus in February 2012 with the passage of the Middle Class Tax Relief and Job Creation Act of 2012. This law's passage set into motion the planning process to build a nationwide network that will allow first responders across different jurisdictions to fully communicate and use data communications.

NTCA has been actively involved in the planning of this project because it recognizes that this network will not be for the sole use of local and national governments but also 8 will be used commercially. NTCA members that wish to participate in this project buildout must have that opportunity. There is also a great deal of concern among some members of Congress that the scarce government resources dedicated to this project (approximately $7 billion) not be used to overbuild existing networks, and that requirements to build out in rural areas of the country are met.

Cuberaecurlbu Cybersecurity not only affects a citizen's Internet experience, but it is a significant tool in modern warfare. With the increased attention from consumer advocates and the defense industry, Congress and the president have been working on efforts to incentivize businesses to adopt a cybcrsecurity framework. President Obama signed Executive Order 13636, which directed the National Institute of Standards and Technology (NIST) to create a framework that could be adopted by private industries. NIST released a framework in the fall of 2013. While it currently is drafted as a voluntary set of recommendations and best practices for businesses, NTCA remains active in discussions to ensure that the needs of small telecommunications providers are not left behind.

A number of different pieces of legislation have been introduced on this topic. Much of the debate has centered on what the standards will be for various industries, including which industries are known as "critical infrastructure" and whether they truly will be voluntary for industries. It is anticipated that there will be more discussion during 2014 on what the standards should be for industries, but it is unlikely that Congress will be able to pass a comprehensive cybersecurity package.

Predicting the actions of Congress is difficult in good years, but in the current polarized environment, it is next to impossible. As things move forward, NTCA's policy team will be working to make sure that small companies have a voice.

Because of the 2010 redisbricbing efforts, many states sent congressional representatives to Ulashingbon. DH-from polarized, gerrgmandered districts.

NTCH has been actively involved in tiie planning of [FinsbNeb] because ib recognizes bhab bhis netiuonk mill nob be for bhe sole use of local and nabional governmenbs bub also mill be used commercially.

Meagan Foster is director of government affairs at NTCA. Contact her at [email protected].

(c) 2014 National Telephone Cooperative

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