- The Senate and FCC are working to ease financial reporting requirements for rural ISPs
- The broadband industry is thrilled, but the question remains whether these moves will matter in Trump’s second term
- Changes in federal broadband programs could “render these actions relatively insignificant," said NSR’s Blair Levin
Rural broadband providers just got a couple of early Christmas gifts in the form of regulatory relief. But whether the moves will amount to anything once Trump takes office remains to be seen.
The U.S. Senate this month passed legislation that would essentially simplify financial reporting requirements for rural telecommunications providers. The bill, referred to as the ACCESS Rural America Act, increases the shareholder registration threshold for providers that “receive support through certain Federal universal service support mechanisms.”
While it doesn’t sound too exciting at first glance, the legislation underscores the regulatory headache smaller broadband providers face when dealing with the Securities and Exchange Commission (SEC), said Mike Romano, EVP of NTCA – The Rural Broadband Association.
Currently, these providers are required to register with the SEC “as if they were major publicly traded corporations, simply because they have broad community ownership,” he told Fierce via email.
In many rural parts of the country, small broadband providers that were first formed by a handful of people “may now have several hundred shareholders simply as a result of gifting or splitting of shares among family members over time.”
“It makes no sense to subject these community-based and community-owned providers to burdensome SEC reporting requirements and expensive audits,” Romano said.
The ACCESS Rural America Act must now be passed by the House of Representatives before it can become law. Separately, the Federal Communications Commission (FCC) this week unveiled some regulatory relief of its own for providers that receive funds from its high-cost programs.
The Report and Order increases the number of banks qualified to issue letters of credit (LOC) to providers that participate in the Rural Digital Opportunity Fund (RDOF), Connect America Fund Phase II (CAF-II), the 5G Fund, among other FCC programs.
A letter of credit guarantees that a broadband provider has enough funds to fulfill the requirements of a grant. ISPs and industry groups last year rallied against a LOC requirement for BEAD program participants, arguing it was “overly burdensome.” NTIA ended up releasing a waiver for the requirement.
The FCC also updated its LOC rules for CAF-II and RDOF recipients, allowing providers to reduce the value of their letter of credit once they’ve met certain deployment milestones.
Small victories – for now
Just over a month remains before Trump’s second presidential term begins. That left us wondering whether these policy changes will even matter.
The biggest question is whether the new administration will take the view that satellite broadband is equal or better than terrestrial alternatives. If that happens, “that could lead to changes in BEAD and USF that render these actions relatively insignificant in the long term,” said New Street Research policy analyst Blair Levin.
Otherwise, these regulatory moves are “valuable though incremental relative to the more significant boosts provided by BEAD and USF under their current constructs,” he told Fierce.
But the ACCESS Rural America bill and the FCC’s move seem to take on the regulatory-lite approach we expect to see in 2025. Incoming FCC Chair Brendan Carr has been pretty vocal about cutting down regulatory red tape around federal broadband programs.
WISPA is all for the changes, as they would make things easier for small providers that are meeting their program obligations.
“Updating the rules to reduce ongoing administrative costs makes more support available for actual deployment to unserved rural Americans, helping to drive broadband access and adoption where it is already costly to go,” said Louis Peraertz, WISPA’s VP of Policy.
Fiber Broadband Association (FBA) President Gary Bolton also expressed hope for the regulatory updates. “Federal policies that support broadband providers in connecting all Americans to fiber are always welcome,” he said in a statement provided to Fierce.
"We’re optimistic the new Congress and administration will provide opportunities to build out more robust rural fiber connectivity," Bolton added.
NTIA chief Alan Davidson said this week he will resign on January 20. We’re keeping our eyes peeled to see who Trump will pick to lead the BEAD program and White House's telecom initiatives going forward.