FCC commissioner Michael O'Rielly said he has gotten responses from letters he sent following up on complaints by some Wyoming cable broadband providers that the state was using CARES Act money to overbuild existing broadband providers. He was clearly not happy with the the answers.

The CARES Act had $1.5 billion in funding to aid communities impacted by COVID-19 that could be used for broadband deployment among many other things. Then there was another $16 billion that could be tapped for distance learning, including connectivity.

Related: O'Rielly Seeks Answers on Potential Wyoming Overbuilds

"I saw some of the responses from the Wyoming Business Council last weekend," he told Multichannel News. "They said the goal was to get the money and spend it in the time frame the CARES Act had outlined," he said. "That, to me, is incredibly problematic."

The grants are being administered by the Wyoming Business Council's (WBC) Connect Wyoming program. O'Rielly, who is no fan of using government money to overbuild existing networks built with private capital, told Wyoming Governor Mark Gordon that, based on information brought to his attention, "the WBC has not publicly released the applications or proposed coverage maps for the grant recipients, nor has it taken the requisite steps to ensure subsidized overbuilding did not and will not occur."

Of the WBC response, O'Rielly said: "It wasn't like, 'How do we soundly spend this money.' It was 'How do we make sure we get it and get it out the door so we can spend it in time.' That is not how dollars should be spent.

O'Rielly has said that there are allegations--he did not say from whom--that one or more of the grant recipients will wind up overbuilding recipients of the FCC's Universal Service Fund Connect America Fund Phase II money. He said if that is true, it would "not only artificially impair the value of the FCC’s past and current subsidies but would also undercut providers’ willingness to compete in future FCC reverse auctions."

He told the governor he would like the WBC to immediately release coverage maps for its projects so that current cable and fiber broadband providers in the state can challenge duplicative projects and stop funding for any that subsidize overbuilding.

It looks like Senate Republicans are going to try and get Nathan Simington confirmed to the FCC before the end of the year and the exit of commissioner Michael O'Rielly, who he will be replacing.

The Senate Judiciary Committee has scheduled his confirmation hearing for Nov. 10.

Simington was nominated by the President after he rescinded O'Rielly's nomination after the commissioner criticized the effort to get the FCC to regulate social media.

Related: Trump Nominates NTIA Adviser for O'Rielly Seat

Simington is currently senior advisor at the National Telecommunications and Information Administration (NTIA), which is the President's chief communications advisory arm, where he worked on 5G security/supply chain issues.

He also reportedly worked on NTIA's petition to the FCC to come up with the regime for regulating social media that the President had called for in his Sec. 230 executive order, and that O'Rielly criticized.

O'Rielly could continue to serve in his post until Congress adjourns at the end of the year or Simington has had a nomination hearing in the Senate and is confirmed in that body, whichever comes first.

If O'Rielly had to leave before Simington was confirmed, the FCC would be down to four members, two Republicans and two Democrats. 

WASHINGTON — Federal Communications Commission member Michael O'Rielly told rural broadband providers Monday that he would continue to fight the use of government broadband subsidy money to overbuild existing broadband service deployed with private capital, including from high-profile funds with laudable goals.

That has been one of his signature issues, a signature he was glad to write large in a speech to NTCA – The Rural Broadband Association’s legislative and policy conference in D.C.

O'Rielly has both sides of the conference covered, having dealt with legislation, including the 1996 Telecom Act, as a hill staffer, and with policy implementation at the FCC.

O'Rielly has long been working to expose efforts by the FCC and other agencies to use federal funds to overbuild their networks.

RELATED:O'Rielly Grills USAC on E-Rate Overbuilding

He suggested that some were trying to hijack the E-rate and Rural Health Care Universal Service Fund (USF) programs to "cannibalize your service areas, steal the biggest and most lucrative clients around, and jeopardize your ability to serve remaining consumers." O'Rielly favors capping the USF fund.

Last month, O'Rielly asked the USF administrator whether E-rate subsidies should be used to fund wide area networks (WANs) where government subsidies have already been used to lay fiber. 

The Republican commissioner told NTCA that the result is that scarce funds are diverted from unserved areas that most need them.

O'Rielly focused on specialized networks for E-rate and healthcare that have been funded "notwithstanding the fact that existing local providers could and would be willing to carry any necessary traffic and offer the requisite services."

He suggested those funds were being manipulated by "certain applicants," that "can only be met by a select, hand-chosen provider, sometimes the applicant itself under a self- provisioning scheme."

He says those networks were being allowed to "steal" customers from rural broadband providers, customers that could be critical to their viability.

He also warned about billions in Farm Bill broadband subsidies being used to overbuild.

"Thankfully, there is general agreement that the USDA must coordinate with the FCC to keep this from happening," he said. "However, coordination doesn’t mean a ban on overbuilding; it can mean as little as having a conversation between government agencies."

He told them to be on the lookout for "new pots of funding — such as potential federal infrastructure funding — that could create similar mischief."

O'Rielly said few were willing to tackle such overbuilding issues because "just talking about restricting E-Rate, Rural Health Care, or USDA funding provokes outrage by particular interest groups … Many of these entities don’t want any restrictions imposed on their ability to get federal funds, no matter the purposes."

But he suggested it was a tough job he felt it was his duty to tackle as a government official charged with making sure that all Americans have access to broadband. "Every dollar wasted to overbuild existing provider networks comes at the expense of those Americans without broadband service."

ISPs, including rural providers, have joined O'Rielly in arguing that money should be targeted to unserved areas, rather than underserved.

Rep. Michael O'Rielly has told the Hill that it should levy a spectrum fee on government users as a way to insure they use that valuable resource effectively.

That came in a letter to new House communications Subcommittee Chairman Marsha Blackburn (R-Tenn.) this week.

Blackburn's first subcommittee hearing as chair was on the reauthorization of the National Telecommunications &Information Administration, which oversees government spectrum users as the FCC does private users.

Blackburn has said that insuring efficient government use is a priority for the subcommittee as part of reauthorization, and O'Rielly was all for it.

He suggested that the subcommittee look closely at enacting an Agency Spectrum Fee as a way to improve efficiency, and, by imposing a cost to holding on to it, even a conservative one, could serve as an "appropriate and necessary stick" that would keep them from sitting on valuable spectrum real estate unless it
was mission critical.

He did not take credit for the idea--which was explored by an NTIA spectrum advisory committee, though as a Hill staffer he has experience with coming up with reauthorization priorities.

FCC Chairman Ajit Pai has added two more process reforms to his growing list of changes at the FCC.

The first is related to his decision to release the texts of two February meeting agenda items as a pilot project for doing so with all meeting items before they are voted on.

At the suggestion of Democratic commissioner Mignon Clyburn, Pai said Tuesday (Feb. 7), he will release a one-page "fact sheet" summary of items when the text is released for any March meeting items.

Also, at the suggestion of Commissioner Michael O'Rielly, any substantive changes to an item between the time it is circulated and the meeting at which it is voted will have to be proposed by commissioners rather than staffers.

"This reform will help promote accountability and allow Commissioners to better understand where edits are coming from," said Pai in a statement, adding that the change is effective immediately.

O'Rielly has long argued for more accountability for changes, including his longstanding objection to allowing items to be edited after they have been voted.

"I appreciate the Chairman’s quick attention to the 'own your edits' idea that many of us have pushed to be adopted, as it will provide better transparency as we negotiate our items," said O'Rielly. "I also support Commissioner Clyburn’s suggestion on making summaries available for items that have been made Public.  While both relatively small fixes, this bodes well for the new Commission’s ability to work together to get our processes into better shape."

“Today’s announcement that the FCC will be implementing process reforms championed by Commissioners O’Rielly and Clyburn is a welcome sign of a return to bipartisanship at the commission," said House Communications Subcommittee Chairman Marsha Blackburn. "While the commissioners won’t always agree, it is heartening to see that they can find common ground on the need for reforms to the broken FCC process. I once again applaud Chairman Pai for these thoughtful actions [she also praised earlier process reforms from the new chairman] and commend the entire commission for their decision to work together to bring transparency, accountability, and collegiality back to the FCC.”

Republican FCC Commissioner Michael O'Rielly told an American Action Forum audience Tuesday that while the Federal Trade Commission may have grounds to investigate Netflix over downgrading video quality for some wireless services--prominently AT&T and Verizon--and not others, he said the company "never violated the Commission’s net neutrality rules."

O'Reilly said that as Netflix and others have so strenuously pointed out [and as FCC Chairman Tom Wheeler has said at every opportunity], "net neutrality rules only apply to ISPs, not standalone edge providers, such as Netflix. This is completely correct as all of the prohibitive practices, costs and obligations of those rules only apply to broadband providers. So there is no net neutrality violation to explore," he said, according to a copy of his speech supplied to Multichannel News/B&C.

O'Reilly said he would strongly oppose any application of the rules to edge providers, as he did to ISPs.

"The solution to unnecessary regulatory burdens and overreach is not to subject everyone to them, but to reduce them for all. In other words, use the parity argument to help companies and consumers alike, rather than dragging everyone into the abyss," he said.

But Netflix isn't off the hook in O'Rielly's book.

He told his audience the FCC should investigate whether Netflix had knowingly made any false statements to the FCC, like accusing ISPs of downgrading when it was the company's own actions that were responsible.

O'Rielly also suggested the Netflix revelations called into question not only representations made it and Google related to interconnections but the "entire foundation and rationale of the net neutrality decision," which included interconnection under Title II for the first time in part because of interconnection issues raised by edge providers.

"Certainly, the entire interconnection regime was predicated on the fears of anti-competitive peering and gatekeeper status concocted by Netflix. And yet, at the same time it was making these claims, Netflix, itself, was engaged in highly suspect behavior," O'Rielly said.

Industry players and policymakers were quick to react to the President's speech in Iowa promoting municipal broadband and slamming other ISPs over price and service.

The American Cable Association praised the President, but one of its high-profile members saw it quite differently.

This from Rocco Commisso, the CEO of Mediacom:  “I think it is fair to say that the only reason the vast majority of Iowans are able to enjoy broadband speeds that are significantly faster than dial-up, DSL or cellular 3G and 4G service, for that matter, is because Mediacom has honored its commitment made 15 years ago. At a time when no one else was willing to spend the money, we promised to take the necessary risks to ensure that the citizens of Iowa were not mere bystanders in the digital revolution, but active participants in the broadband economy.  Mediacom has enriched the lives of Iowans and provided fertile ground for businesses, large and small, to prosper and grow.

“I mean no disrespect to the President,” Commisso continued, “but traveling to Iowa in order to be a cheerleader for government-owned and taxpayer-funded broadband networks while ignoring the far more significant contributions of Mediacom is an insult to our 1,600 dedicated employees who live and work in Iowa.”

ACA praised the President for highlighting 1 gig offering of Cedar Falls municipal provider Cedar Falls Utilities. also an ACA member, and other municipal systems. "What ties Cedar Falls Utilities, Mediacom and all of these providers together is a drive to give American consumers broadband service that enables them to access entertainment content, exchange social information, and engage in civic debate," said ACA. "Consumers consider this connectivity critical, and ACA members, whether public or private, are responding by investing in innovative services and new infrastructure to make even higher speed service a reality."

ACA suggested that municipal nets could work with private ones to advance the President's goals. "To further deployment of high-speed broadband infrastructure throughout the country, we should encourage communities to work to facilitate deployments by private sector providers by finding ways to lower the costs of deployment and accelerate demand, ACA president Matt Polka said.  This teamwork is essential to ensuring that all Americans have this key tool to participate fully in our economy and society.”

Mediacom did not sound in a cooperating mood. "CFU is a municipal utility that leverages its government-conferred monopoly over electric, water and gas service to unfairly compete with private enterprises for cable television and high-speed Internet customers," the company said. The President’s remarks combined with the selection of CFU as the venue for his speech clearly show that the White House wants to waste taxpayer dollars to supplant our Nation’s private sector broadband providers with government-owned utility companies."

USTelecom, which represents AT&T, Verizon and other telecoms, matched the President's strong language with some of its own.

"“The president’s Title II reclassification and state preemption proposals, taken together, call for the federal government to regulate the Internet, and for municipal governments to own the Internet.  If acted upon by the Federal Communications Commission, they would be sweeping exercises of authority – raising constitutional concerns related to separation-of-powers, the scope of an independent agency’s Congressionally delegated authority, and the role of the states in our federal system," said USTelecom president Walter McCormick.. And, how will these expanded government roles be financed? With higher costs to consumers, and new taxes and fees on local  citizens.......AT&T is the nation’s leader when it comes to expansion of gigabit networks, with current plans to cover up to 100 cities and  municipalities. CenturyLink is making gigabit service available in 16 cities. Verizon FiOS led the way on gigabit fiber deployment as the prime mover in this field. And, virtually every member of this association, large and small, urban and rural, is engaged in fiber upgrades.  These positive actions should be encouraged through pro-investment policies, not discouraged through burdensome new regulation and taxpayer  subsidies to duplicative government enterprises.”

Even before the speech, National Cable & Telecommunications Association president Michael Powell was pointing to the private industry's investments in plant and speed.

“The cable industry has invested over $230 billion to build robust broadband networks that reach 93 percent of U.S. homes, said Powell. The President said that access to broadband was not the same as access to broadband at the speeds that will be needed.

"We agree with the President that connecting all Americans to this critical technology should be a national priority," said Powell, "and that is why we have long supported the use of scarce government funding to support universal service in areas where private networks are not economically viable.

“America’s decades-long policy of promoting private investment and exercising a light regulatory touch has yielded substantial benefits for American consumers," he continued. "As evidence, cable’s top broadband speeds have increased over 3200 percent in a decade, Akamai recently reported that 12 American states are among the 20 fastest regions of the world and our markets remain the envy of the world.  While government run networks may be appropriate in rare cases, many such enterprises have ended up in failure, saddling taxpayers with significant long-term financial liabilities and diverting scarce resources from other pressing local needs.

Republican Commissioner Michael O'Rielly saw the President's broadband push as an unwarranted intrusion in the business of an independent agency.

"It is clear that this Administration doesn’t believe in the independent nature of the FCC. It is disappointing that the Commission’s leadership is without a sufficient backbone to do what is right and reject this blatant and unnecessary interference designed to further a political goal ," he said. "Substantively, this missive is completely without statutory authority and would be a good candidate for court review, if adopted. In reality, this debate is about preempting a state’s right to prevent taxpayer rip-offs. Municipal broadband has never proven to be the panacea that supporters claim and the Administration now boasts. Instead, we have seen a long track record of projects costing more than expected and delivering less than promised."

NTCA–The Rural Broadband Association gave the President mixed reviews.

"[NTCA] applauds President Obama’s focus on increasing every American’s access to robust and affordable broadband," the group said. "But it’s not clear that encouraging local governments to get into a very difficult communications business for the first time on their own is the best path to achieve that important goal."

In the week since President Obama's unexpected "Title II" video debuted, plenty of Washington verbiage has been spilled on what happens next - and why.

The White House recommendation that the FCC should place public utility regulation upon Internet Service Providers rankled countless insiders and, of course, totally confused "civilians" - the unwashed masses who merely rely on the Internet for all kinds of business, consumer, financial and entertainment services.

By fortunate coincidence, several D.C. think tanks had already scheduled broadband seminars for the week, some timed as follow-up analyses to the recent Congressional elections, others keyed specifically to the evolving debate about Title II regulation.  Obama's screed merely inserted an added dimension into the predictable, politically-fueled pronouncement that emerge from these think-tank symposia.

What did not emerge from these seminars or from Obama's appeal was any comprehensive approach to the big issue confronting policy-makers: an omnibus overhaul of the nation's communications law, the elusive "Telecommunications Act Reform" process on Capitol Hill.

Indeed, last week's Kabuki maneuvering and posturing about the FCC and Title II was a good way to distract attention from a really big topic - policy overhaul - and focus instead on the pretty-big topic du jour - Internet regulation. To be fair, some of the Washington events touched on copyright reform (which might include retransmission consent), media mergers, Internet tax issues (some of which require immediate action) and spectrum allocation.

Collectively, these interconnected issues cry out for integrated analysis and action. Realistically, the new Congress is unlikely to tackle such a massive undertaking - especially when brush fires such as Title II can both distract attention and simultaneously attract so much lobbying support  (i.e. contributions).

Inevitably, at last week's seminars, there was substantial debate about the merits of "Section 706" (the part of the 1996 Telecom Act that lets the FCC oversee "Advanced Telecommunications Capabilities") versus Title II regulation.   For example, at Friday's Free State Foundation session entitled "Thinking the Unthinkable" (i.e. the 'utility model" regulation) Rep. Bob Latta (R-Ohio), who sits on the House Communications Subcommittee, and the two Republican members of the FCC blasted the "unthinkable" idea of Title II regulation.

FCC commissioners Ajit Pai and Michael O'Rielly(pictured left and right) both pointed to two significant ripple effects of imposing Title II regulation on ISPs: putting onerous Universal Service Fund fees on ISP usage and sending a bad message about America's Internet stance to foreign authorities. The USF issue would have more immediate impact on cable operators and other ISPs since customers would see substantial fees directly in each month's bill. 

Pai and others are even more concerned about any policy that would embolden foreign governments, especially repressive regimes, to impose Internet regulation of all sorts on their domestic system operators. Pai warned that if the FCC adopts a restrictive Title II policy, it would further diminish America's credibility and tell other nations to "do as we say not as we do."

In addition, there are immediate problems, such as how a unilateral U.S. regulation policy will affect international treaties for dealing with transborder communications, an issue with vast consequences in the Internet Protocol era.

In separate remarks at the Free State Foundation event, O'Rielly focused on forebearance, the process by which the FCC could carve out exemptions from its most severe policies.   But  as O'Rielly said, it "should not  be conceived as easy"  and there has been no indication about which parts of Title II might receive such forebearance.

Last week's seminars served as reminders about the complexity of the individual issues and the inevitable frustrations triggered by such piecemeal action rather than a comprehensive process, such as a Communications Act overhaul.

Going down either road will take a lot of time, and as the recent policy-wonk omphaloskepsis reminds us: there is unending contemplation ahead.  Bringing it all into a bleak perspective were the concluding comments at the FSF seminar.

It's a "regulatory rat hole," said Gerald Faulhaber in an abject summary of the FCC's current options.  Faulhaber, a former FCC chief economist and now professor emeritus at the University of Pennsylvania's Wharton School, characterized the choices:

"The only difference between Title II and Section 706 is how fast we go down the rat hole."